Example

♤ Volkswagen, a German company trades on New York Stock Exchange. The investor in America can easily invest into the German company, through the stock exchange.

♤ Volkswagen is listed on the American stock exchange after complying the required laws.

♤ On other hand if the shares of Volkswagen are listed in stock markets of countries other than US then it is termed as GDR.

14.3. Indian Depository Receipts (IDRs)

♤ IDRs are transferable securities to be listed on Indian stock exchanges in the form of depository receipts created by a Domestic Depository in India against the underlying equity shares of the issuing company which is incorporated outside India.

♤ In India any company - whether private limited or public limited or listed or unlisted - can issue DRs. However listed DRs enjoy some tax benefits.