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What is Global Depository Receipt?

Global Depository Receipt, or a GDR is a negotiable financial instrument that is issued by a foreign bank other than the United States. It represents securities of a foreign company listed in any country’s share market other than the United States.

These receipts are financial instruments just like shares but traded in global markets.

Consider GDR as the global equivalent of an American Depositary Receipt (ADR).

This financial instrument represents shares in a foreign company, such as a foreign branch of an international bank.

GDRs are traded by investors in several markets. These markets, as the name suggests, are used to provide the trade of long-term debt instruments and for generating capital.

In an international market, the transactions involving GDRs have lower associated costs as compared to other trade options for foreign securities.

A handful of Indian companies have GDRs. These companies include Reliance Industries, M&M, State Bank of India, Axis Bank, GAIL, among others.

How these GDRs traded the previous day could give clues about the opening levels of these companies in India.

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