Question

State the advantages of Indian Depository Receipts (IDRs).

Answer 1

1. Indian investors get an additional opportunity for investment in foreign companies.
2. Indian stock markets receive a new financial instrument for trading purpose.
3. Indian investors face less risk as only sound foreign companies are allowed to issue IDRs.
4. Foreign companies can raise capital from India through IDRs.
5. IDRs provide an opportunity to foreign companies to get listing on Indian stock exchanges.
6. The issuing company gains popularity.