Question

Explain the role of IDR as sources of finance for Indian industries.

Answer 1

1. IDRs are denominated in Indian rupee.
2. These are issued by a foreign company in India.
3. IDRs can be listed on any stock exchange in India.
4. A single IDR can represent more than one share, e.g., one IDR = ten shares.
5. Holders of IDRs have no voting rights.
6. Holders of IDRs can get them converted into shares after one year from the date of issue.
7. The Indian Depository will distribute the dividend to the holders of IDRs.