INDIAN DEPOSITORY RECEIPTS :

According to Section 2(48) of the Companies Act, 2013 “Indian Depository Receipt” means any instrument in the
form of a depository receipt created by a domestic depository in India and authorised by a company incorporated
outside India making an issue of such depository receipts;

Section 390 of the Companies Act, 2013 and rule 13 of Companies (Registration of Foreign Companies) Rules,
2014 lays down the procedure for issue of Indian Depository Receipts.

Apart from this a company has to comply with Chapter X and XA of SEBI (ICDR) Regulations, 2009 to issue
IDRs or a rights issue of IDRs.

An IDR is an instrument denominated in Indian Rupee in the form of a depository receipt created by a domestic
depository (Custodian of securities registered with SEBI) against the underlying equity of issuing company to
enable foreign companies to raise funds from Indian Securities Markets.

In an IDR, foreign companies would issue shares, to a domestic (Indian) depository, 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. To that extent, IDRs are derivative
instruments because they derive their value from the underlying shares. Standard Chartered PLC is only company
to offer IDR in the Indian market.