Dual Listing
There has recently been a fair amount of discussion regarding the ability of companies to carry out dual listings in India. This arises in the context of dual listing as a possible structure being considered in the Bharti-MTN transaction.
Generally, dual listings occur when two or more companies (that otherwise intend to merge) continue as separate entities with separate sets of shareholders, but agree to combine their operations under a common management. In that sense, there is a “virtual” merger or sorts rather than an actual legal merger of the companies. This may also require any or all of the companies involved to be listed in multiple jurisdictions, particularly where there is a cross-border transaction.
Indian Depository Receipts (IDRs)
The Indian capital market has got a new product- Indian Depository Receipts, popularly known as IDRs.
As per the definition given in the Companies (Issue of Indian Depository Receipts) Rules, 2004, IDR is an instrument in the form of a Depository Receipt created by the Indian depository in India against the underlying equity shares of the issuing company. In an IDR, foreign companies would issue shares, to an Indian Depository (say National Security Depository Limited – NSDL), which would in turn issue depository receipts to investors in India. The actual shares underlying the IDRs would be held by an Overseas Custodian, which shall authorize the Indian Depository to issue the IDRs.
American Depository Receipts (ADRs)
American depository receipts, or ADRs, are a bit of financial magic that deliver the world to the doors of US investors.
An American Depository Receipt, or ADR, is a security issued by a U.S. depository bank to domestic buyers as a substitute for direct ownership of stock in foreign companies. An ADR can represent one or more shares, or a fraction of a share, of a non-U.S. company. Individual shares of a foreign corporation represented by an ADR are called American Depositary Shares (ADSs).
An ADR is a convenient way for companies whose stock is listed on a foreign exchange to cross-list their stock in the United States and make their stock available for purchase by U.S. investors, as these receipts can be traded on U.S. exchanges.
Some ADRs are traded on major stock exchanges such as the Nasdaq Stock Market (NDAQ) and the New York Stock Exchange, which require these foreign companies to conform to many of the same reporting and accounting standards as U.S. companies. Other ADRs are traded on over-the-counter exchanges that impose fewer listing requirements.
Stock dividends and similar adjustments to the underlying shares are paid in cash or ADR dividends by the bank.
Global Depository Receipts (GDRs)
Global Depository Receipt (GDR) is a sort of bank certificate that is issued in more than one country for shares in foreign companies. It can be circulated worldwide in the capital markets. GDR's are issued by banks. Th bank purchases shares of foreign companies and deposit it on the accounts. Thus facilitation of the trade of share is the main objective of GDR, especially those from emerging markets. The values of the related share and the prices of GDR's are often close.
Indian companies can raise equity capital in the international market by issuing the Global Depository Receipt (GDRs). GDRs are designated in dollars and there are no ceilings on investment. The requirement for issuing of GDR is that the company applying should have consistent track record for good performance (financial or otherwise) for a minimum period of 3 years. For infrastructure projects such as power generation, telecommunication, petroleum exploration and refining, ports, airports and roads this condition would be however relaxed.
A Mutual Fund can be defined as an Investment trust, an open-ended fund operated by an investment company which raises money from shareholders and invests in a group of assets, in accordance with a stated set of objectives. mutual funds raisemoney by selling shares of the fund to the public, much like any other type of company can sell stock in itself to the public. Mutual funds then take the money they receive from the sale of their shares (along with any money made from previous investments) and use it to purchase various investment vehicles, such as stocks, bonds and money market instruments. In returnfor the money they give to the fund when purchasing shares, shareholders receive an equity position in the fund and, in effect, in each of its underlying securities. For most mutual funds, shareholders are free to sell their shares at any time, although the price of a share in a mutual fund will fluctuate daily, depending upon the performance of the securities held by the fund. Benefits of mutual funds include diversification andprofessional money management. Mutual funds offer choice,liquidity,and convenience, but charge fees and often require a minimum investment.Mutual Fund
