GDR and ADR are different types of depository receipt. They are not the same as they do not serve the same possible. GDR stands for Global Depository Receipt and ADR stands for American Depository Receipt. GDR is a type of depository receipt issued by an international depository bank. It is used to represent the stock of a company in the foreign market.
GDR enables companies to participate in trading in the foreign market. ADR, on the other hand, is a type of depository receipt issued by a US bank. This can be used only in the US stock exchange. It enables companies to invest in foreign companies in the US stock exchange. Hope you find this information helpful.
The meanings of these two are different from each other. ADR means American Depository Receipt while GDR is Global Depository Receipt. The GDR makes it possible for companies to trade with companies that are in the foreign market so that the trading will not be limited to the American stock market. ADR can be used by a US bank that is also based in the US but will be trading stocks that are not from the US.
The GDR is often issued in the European market while the ADR can be issued in the American market. Basically, ADR makes it okay for non-US companies to trade in the US stock market while the GDR allows US companies to trade in the foreign market.
Indian companies usually use the terms ADR and GDR to raise their funds from the foreign and international capital market. ADR or American Depository Receipt is an instrument issued by a US bank that can be negotiated between them and Indian companies to trade in the US stock exchange. This is issued in the domestic capital market in the United States. Onerous is required to file disclosure, and the negotiations are done in America only.
GDR, on the other hand, is Global Depository Receipt that is also a negotiable instrument but issued by the international depository bank. The country’s stock market can trade to any foreign companies aside from the US stock market. This is issued in the European capital market and can be negotiated all over the world. The disclosure requirement of GDR is less onerous compared to ADR.