Full formBusiness & Corporate
ADRstands forAmerican Depositary Receipt
Full Form of ADR
What is ADR?
An American Depositary Receipt (ADR) is a negotiable certificate issued by a US depository bank that represents a specified number of shares in a foreign company's stock. It enables Indian companies to access US capital markets without undergoing the full listing process on American exchanges. ADRs trade on US stock exchanges like the NYSE or NASDAQ, and their prices move in line with the underlying Indian shares, adjusted for currency and fees. In India, major firms such as Infosys, Tata Motors, and Dr. Reddy's Laboratories have listed ADRs, allowing global investors to gain exposure to the Indian economy. ADRs are widely used by international portfolio investors and are a key topic in finance and commerce examinations, including the CFA, CA, and MBA curricula. They simplify cross-border investment by eliminating the need for direct foreign exchange transactions and provide liquidity and transparency. Understanding ADRs is crucial for anyone involved in global investing or studying international financial markets.
ADR का फुल फॉर्म
अमेरिकी डिपॉज़िटरी रसीद
Example
The Infosys ADR closed at $18.50 today, reflecting the strong performance of its shares on the National Stock Exchange of India.
ADR — frequently asked questions
What is the full form of ADR?
ADR stands for American Depositary Receipt, a certificate issued by a US bank representing shares of a foreign company traded on US stock exchanges.
How do Indian companies issue ADRs?
Indian companies issue ADRs by depositing their shares with a custodian bank in India, which then instructs a US depositary bank to issue ADRs to investors in the United States.
What is the difference between ADR and GDR?
ADR is listed on US exchanges and denominated in US dollars, while GDR (Global Depositary Receipt) can be listed on European or other global exchanges and is often denominated in euros or other currencies.