What is Global Depositary Receipt (GDR)?
A Global Depositary Receipt (GDR) is a form of equity or share certificate that represents ownership interest in a company based in one country which then holds and sells its share by a firm or organization located in another country. It is traded on international stock markets. GDRs are an instrument through which companies may raise funds overseas, that is, outside their home country markets, by providing their shares to investors. However, they do not need to be directly listed on foreign stock exchanges. This instrument helps an investor to invest in companies in various countries and, thus diversify his prime portfolios.
Being a part of the globalized world of finance, investors look for opportunities outside their local markets. So, to allow investors to extend their boundary of investment, Global Depositary Receipt (GDR) comes into the picture enabling them to invest internationally. GDRs are essential in helping companies get capital from around the world and also to the investors who can utilize their portfolios to invest in various companies.
Table of Content
- How GDRs Work?
- Uses of Global Depository Receipts
- Examples of a GDR
- Characteristics of Global Depositary Receipt
- Features of Global Depositary Receipt (GDRs)
- Trading Global Depositary Receipt (GDRs)
- Advantages of Global Depositary Receipt
- Disadvantages of Global Depositary Receipt
- Global Depositary Receipt (GDRs) vs. American Depository Receipts (ADRs)
- What is GDR in Stock Market?
- Conclusion
- Frequently Asked Questions (FAQs)