Introduction  of Indian Depository Receipts :

The world has became global village due to the technology advancement and as a result the Securities Market have become international. Companies that previously had to raise capital in the domestic market can now tap foreign sources of capital through ADR/GDR/FCCB/FCEB in overseas market to raise fund from international market. As India is a preferred investment destination among international investors, the Government of India has introduced the concept of Indian Depository Receipts (IDRs) to facilitiate listing by foreign companies on Indian Stock Exchanges. Global banking giant Standard Chartered PLC was came out with the first issue of IDR and listed itself on the Indian stock exchanges in the year 2010. The IDR issue by Standard Chartered PLC was not only the first IDR offering but it was also the first public offering to complete listing and trading within the reduced timelines of 12 working days as notified by SEBI vide its circular dated April 22, 2010.

Indian Depository Receipt means any instrument in the form of a depository receipt created by Domestic Depository in India against the underlying equity shares of issuing company. “Domestic Depository” means custodian of securities registered with SEBI and authorised by the issuing company to issue Indian Depository Receipts.

Overseas Custodian Bank means a banking company which is established in a country outside India and has a place of business in India and acts as custodian for the equity shares of issuing company against which IDRs are proposed to be issued by having a custodial arrangement or agreement with the Domestic Depository or by establishing a place of business in India.