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Questions
What is GDR?
What is meant by Global Depository Receipts (GDRs)?
Answer in Brief
Solution
- A GDRs is an instrument that a company issues in US dollars in order to collect foreign capital.
- It is traded on all those foreign stock exchanges where it is listed.
- For example, the GDRs issued by Reliance Industries (an Indian company) are listed on the New York Stock Exchange.
- Therefore, these can be purchased and sold only on this stock exchange.
- The term 'global' means the GDRs can be issued in any foreign country.
- Companies with a good track record issue GDRs.
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