Presented By Nitin Agarwal

1. CONCEPT OF ADR, GDR, P.NOTES & IDR. Presented By NitinAgarwal

2. American Depository Receipt • ADR represents ownership in the shares of a non-U.S. company that trades in U.S. financial markets. • ADRs carry prices in US dollars, pay dividends in US dollars, and can be traded like the shares of US-based companies. • ADR is issued by a U.S. depository bank and can represent a fraction of a share, a single share, or multiple shares of the foreign stock • The price of an ADR often tracks the price of the foreign stock in its home market

3. Cont… • The first ADR was introduced by JPMorgan in 1927, for the British retailer Selfridges&Co • There are currently four major commercial banks that provide depositary bank services - JPMorgan, Citibank, Deutsche Bank and the Bank of New York Mellon. • One can either source new ADRs by depositing the corresponding domestic shares of the company with the depositary bank • one can obtain existing ADRs in the secondary market.

4. Global Depository Receipts • A Depository Receipt Convertible into a fixed number of Equity Shares. • Can be converted at any time. • Negotiable: Listed and traded on Foreign Stock Exchange. • Carry on voting rights until conversion. • Rupee dividends before and after conversion. • Traded on Indian Stock Exchange after conversion

5. Participatory Notes • Participatory notes are instruments that derive their value from an underlying financial instrument such as an equity share. • Participatory notes are instruments used for making investments in the stock market • Participatory notes are not registered with the SEBI to invest in Indian Securities • It rose from 32% late last year to 51.6% by August 2007. • Participatory notes are popular because they provide a high degree of anonymity, which enables large hedge funds to carry out their operations without disclosing their identity • Participatory notes are like contract notes transferable by endorsement and delivery

6. Indian Depository Receipt • An IDR is an instrument denominated in Indian Rupees in the form of a depository receipt created by a Domestic Depository against the underlying equity of issuing company to enable foreign companies to raise funds from the Indian securities Markets.

7. Eligibility Criteria Given Under IDR • Pre‐issue paid‐up capital and free reserves of at least US $ 50 million and have a minimum average market capitalization (during the last 3 years) in its parent country of at least US$ 100 million; • A continuous trading record or history on a stock exchange in its parent country for at least three immediately preceding years; • A track record of distributable profits for at least three out of immediately preceding five years; • Listed in its home country and not been prohibited to issue securities by any Regulatory Body and has a good track record with respect to compliance with securities market regulations. • The size of an IDR issue shall not be less than Rs. 50 crores

8. Requirements For Investing In Idrs • IDRs can be converted into the underlying equity shares only after the expiry of one year from the date of the issue of the IDR • IDRs can be purchased by any person who is resident in India as defined under FEMA. • Minimum application amount in an IDR issue shall be Rs. 20,000. • Investments by Indian companies in IDRs shall not exceed the investment limits, if any, prescribed for them under applicable laws • In every issue of IDR— (i) At least 50% of the IDRs issued shall be subscribed to by QIBs; (ii) The balance 50% shall be available for subscription by non‐institutional.

9. THANK YOU