ADR and GDR are route used by Indian corporate sector used for foreign direct investment.In the absence of convertibility, Indian companies cannot access the global capital market by issuance of shares just as they can be in the domestic market. To enable companies to access global markets, companies can issue shares, but instead of selling in the overseas market directly can off-load the shares to an international depository.
This depository on the strength of underlying shares held by it in the capacity of a custodian, would issue depository receipts and sold, just like shares in the overseas market. These receipts are akin to a share, have similar features but are not shares as it does not confer voting rights to the holder of these receipts. They can be listed and traded at the global stock markets just like the shares. Such receipt issued in the US is known
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