Rajnish Optimist 145 Questions 243 Answers 225 Best Answers 1k Points View Profile Rajnish Asked: May 7, 20212021-05-07T22:10:54+05:30 2021-05-07T22:10:54+05:30In: UPSC PRELIMS What is IDR (Indian Depository Receipt)? Describe Indian Depository Receipts. economics Share Facebook 1 Answer Recent Sweety Stay Original. 142 Questions 117 Answers 102 Best Answers 781 Points View Profile Best Answer Sweety Stay Original. 2021-05-07T22:19:16+05:30Added an answer on May 7, 2021 at 10:19 pm Depository Receipt (DR): A Depository Receipt (DR) is a financial instrument representing certain securities (eg. shares, bonds, etc.) issued by a company/entity in a foreign jurisdiction. Securities of a firm are deposited with a domestic custodian in the firm‘s domestic jurisdiction, and a corresponding ‘depository receipt’ is issued abroad, which can be purchased by foreign investors. DR is negotiable security (which means an instrument transferrable by mere delivery or by endorsement and delivery) that can be traded on the stock exchange if so desired. DRs are used for tapping foreign investors who otherwise may not be able to participate directly in the domestic market. For investors, depository receipt is a way of diversifying the risk, by getting exposure to a foreign market, but without the exchange rate risk as they are foreign currency denominated. Further, they feel safer investing in their home location. Depending on the location in which these receipts are issued they are called as ADRs or American Depository Receipts (if they are issued in the USA on the basis of the shares/securities of the domestic (say Indian) company), IDR or Indian Depository Receipts (if they are issued in India on the basis of the shares/securities of the foreign company; Standard Chartered issued the first IDR in India). in general as GDR or Global Depository Receipt. IDR: A foreign company can access Indian securities market for raising funds through issue of Indian Depository Receipts (IDRs). An IDR is an instrument denominated in Indian Rupees in the form of a depository receipt created by a Domestic Depository (custodian of securities registered with the Securities and Exchange Board of India) against the underlying equity of issuing company to enable foreign companies to raise funds from the Indian securities Markets. Also, ADR /GDR issues based on shares of a company are considered as part of Foreign Direct Investment (FDI) in India, though it is an indirect way of holding shares. 1 Reply Share Share Share on Facebook Share on Twitter Share on WhatsApp Leave an answerCancel replyYou must login or register to add a new answer.Continue with FacebookContinue with Google Related Questions What is EPFO and EPF? Describe ‘Strategic Trade Authorisation’(STA).