Differentiate between ADR AND GDR.

The major differences between American Depository Receipt (ADR) and Global Depository Receipt (GDR) are as follows −

American Depository Receipt (ADR)

• Main purpose is to acquire resources in USA.

• Main objective is to attract investments from foreign companies.

• Issued by US domestic capital market.

• Foreign companies can trade in US markets.

• US dollar as currency.

• Listed in The New York Stock Exchange (NYSE) or NASDAQ.

• Retail investor market.

• Negotiation done in US only.

• Legally complicated.

• Onerous disclosure of terms.

Global Depository Receipt (GDR)

• Main purpose is to acquire resources in different parts of the world.

• Main objective is to invest in different parts of the world.

• Issued by European capital market.

• Foreign companies can trade anywhere other than US.

• Euro as currency.

• Listed in Non US exchange (London stock, etc.)

• Institutional market.

• Can negotiate anywhere.

• Less onerous disclosure of terms.

• Legally less complicated than ADR.