ABSTRACT
This chapter is devoted to firms’ motivation to float Depositary Receipts (DRs). It discusses the benefits of DRs to an economy and tracks Global and Indian trends of DRs. The chapter is devoted to the twin phenomena of peak and near-demise of DRs in India. Indian companies tapping the DR market would have to come out with a DR pricing that is based on the recent closing prices of their domestic shares in the Indian stock exchanges. DRs act as a conduit for foreign companies to approach international capital markets. Permissible securities meant equity shares and debt instruments of a company that are in dematerialised form and rank on par (side by side) with the domestic securities and are listed on a Recognised Stock Exchange. In India, too, in the initial days of reforms, many corporates have followed this route of tapping the global market via global depositary receipts (GDRs) and American Depositary Receipts (ADRs) since 1993.
