question_answer

 Write a short note on the features of GDRs.

Answer:

Ans.     GDRs have following features:

1. A bank certificate issued in more than one country for shares in a foreign company. The shares are held by a foreign branch of an international bank. The shares trade as domestic shares, but are offered for sale globally through the various bank branches.

2. A financial instrument used by private markets to raise capital denominated in either U.S. dollars or Euros.

3. Holders of GDR are eligible only for capital appreciation and dividend but no voting rights.

4. These instruments are called EDRs when private markets are attempting to obtain Euros.

5. It is a negotiable instrument and can be traded freely like any other security.

6. A holder of GDR can convert it into any other security at any time.