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Indian Depository Receipts – New beginning of an old concept

Year 2011
Volume/Issue/Review Month Vol. - IV | Issue 5 | July
Title Indian Depository Receipts – New beginning of an old concept
Authors Chandan Kumar Tripathy
Broad area Indian Depository Receipts – New beginning of an old concept
Abstract
In the fast changing tracks of global financial markets, India has entered
the next lap when Standard Chartered Plc issued Indian Depository
Receipts ( IDRs ) in May this year. This was the 1st IDR issued by any
foreign company which allows the ownership of shares of a foreign
company by an Indian citizen. IDR is a tool for foreign companies to
raise funds from Indian citizens denominated in Indian currency and
the underlying equity shares are held by a foreign custodian.The actual
shares that are represented by the IDRs are held by an overseas
custodian in the home country of the issuing company. Foreign
companies interested to issue IDRs have to meet the strict guidelines
set by SEBI and Indian companies Act, 1956 to safeguard the interests
of the investor’s .Indian investors will get a chance to invest in foreign
companies thus diversifying their portfolios without the foreign
exchange fluctuations as the IDRs are denominated in Indian currency.
Description In the recent past, Indian capital market has become increasingly global in nature and it has become easier to trade around the world financial markets. Following liberalisation, India has removed the barriers restricting foreign investors and abolished l
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Referenceses
  • BBC (May 25, 2010), Standard Chartered’s Indian share offering opens.
  • Business Standard Mumbai (November 12, 2009), IDR listing to enhance StanChart’s commitment
  • to India.
  • DNA (May 14, 2010), Standard Chartered set to make IDR history at Rs 105-115.
  • Hindu Business Line (25 May, 2010), StanChart gets bids from 6 anchor investors.
  • Money Control (March 4, 2010), StanChart plans India listing in June quarter.
  • Reserve Bank of India (July 22, 2009), Issue of Indian Depository Receipts.
  • SEBI circular (03 June, 2011), Redemption of Indian Depository Receipts into Underlying Equity
  • Shares.
  • Securities and Exchange Board of India (August 26, 2009), Issue of capital and disclosure requirements
  • regulations.
  • Securities and Exchange Board of India, Issues by foreign companies in India (Indian Depository
  • Receipts) (IDRs) .
  • The Times (March 4, 2010), Standard Chartered to be listed in Mumbai.
  • Websites
  • http://profit.ndtv.com/video/show/143276/page/11?schedules=india
  • http://www.businessweek.com/news/2010-05-30/standard-chartered-raises-540-million-from-sharesale-
  • in-india.html.
  • http://www.moneycontrol.com/livefeed_pdf/Mar2011/Standard_Chartered_PLC_020311.pdf
  • http://www.rbi.org.in/scripts/NotificationUser.aspx?Mode=0&Id=5185
  • http://www.sebi.gov.in/circulars/2011/circfddil032011.pdf