What is ADR in Stock Market?
Here are some key points about ADR (American Depository Receipts) in the stock market:
- Definition:
An ADR is a financial instrument that represents ownership in the shares of a foreign company, allowing investors to buy and sell the shares on a U.S. stock exchange. - Issued by depositary banks:
ADRs are issued by American depositary banks, which hold the underlying shares of the foreign company in a foreign country. - Traded in U.S. dollars:
ADRs are traded in U.S. dollars on U.S. stock exchanges, making it easier for U.S. investors to buy and sell shares of foreign companies. - Representation of foreign shares:
Each ADR represents a specified number of shares in the foreign company, and the price of an ADR reflects the value of those underlying shares. - Tax implications:
The tax implications of owning ADRs can vary depending on the country in which the foreign company is based and the country in which the investor is a resident. - Convenient investment option:
ADRs provide a convenient option for investors to invest in foreign companies, as they allow them to buy and sell shares on a domestic stock exchange in a currency that they are familiar with. - Risk factors:
As with any investment, there are risk factors associated with owning ADRs, including fluctuations in the value of the underlying shares, currency risk, and geopolitical risk.
ADR vs GDR in Stock Market
ADR and GDR (Global Depository Receipt) are financial instruments that allow investors to buy and sell shares of foreign companies on a domestic stock exchange. They are similar in many ways, but there are some key differences between the two.
- Location:
ADRs are traded on U.S. stock exchanges, while GDRs are traded on international stock exchanges. - Issuing entity:
ADRs are issued by American depositary banks, while GDRs are issued by international depositary banks. - Underlying shares:
Both ADRs and GDRs represent ownership in the shares of a foreign company, but the underlying shares may be held in a different location. - Currency:
ADRs are traded in U.S. dollars, while GDRs may be traded in a variety of currencies, depending on the exchange where they are traded. - Tax implications:
The tax implications of ADRs and GDRs may differ depending on the country in which the investor is based.
Overall, ADRs and GDRs provide a convenient and accessible way for investors to invest in foreign companies, as they allow them to buy and sell shares on a domestic stock exchange in a currency that they are familiar with.
ADR Stock List in 2023
| Name | Market Cap | Revenue | Ratio | Beta | EPS | Dividend |
|---|---|---|---|---|---|---|
| Infosys ADR | 81.01B | 237.37M | 2.25K | 0.645 | 0.713 | 0.3398 (1.77%) |
| ICICI Bank ADR | 72.29B | 12.31B | 18.61 | 0.836 | 45.85 | 0.1119 (0.54%) |
| Wipro ADR | 26.92B | 11.67B | 19.48 | 0.735 | 20.76 | 0.0691 (1.41%) |
| HDFC Bank ADR | 112.02B | 13.67B | 20.97 | 0.777 | 78.90 | 0.491 (0.72%) |
| MakeMyTrip | 2.70B | 477.59M | -92.56 | 1.17 | -0.277 | - |
| Azure Power Global | 213.66M | 59.28M | -5.50 | 0.716 | -62.43 | - |
| WNS Holdings | 3.92B | 1.19B | 31.16 | - | 2.89 | - |
| Lytus Technologies Holdings Ptv | 29.68M | 11.21M | -73.71 | - | -0.011 | - |
| Dr. Reddy’s Labs ADR | 9.05B | 3.14B | 20.49 | 0.247 | 218.98 | 0.3171 (0.58%) |
| Yatra Online | 136.84M | 39.20M | -34.62 | 1.44 | -5.41 | - |
| Sify | 328.94M | 415.20M | - | 1.39 | 5.23 | - |
| Rediff.com India | 5.18K | - | -0.032 | -4,946.60 | -0.254 | - |
| Axis Bank ADR | 32.33B | 509.33B | 12.91 | 1.07 | 67.08 | - |
FAQs
Here are some frequently asked questions (FAQs) about ADRs (American Depository Receipts) in the stock market:
- What is an ADR?
An ADR is a financial instrument that represents ownership in the shares of a foreign company, allowing investors to buy and sell the shares on a U.S. stock exchange.
- How do ADRs work?
ADRs are issued by American depositary banks, which hold the underlying shares of the foreign company in a foreign country. Each ADR represents a specified number of shares in the foreign company, and the price of an ADR reflects the value of those underlying shares.
- What are the benefits of investing in ADRs?
Investing in ADRs provides a convenient option for investors to invest in foreign companies, as they allow them to buy and sell shares on a domestic stock exchange in a currency that they are familiar with.
- Are there any risks associated with investing in ADRs?
There are several risks associated with investing in ADRs, including currency risk, political risk, and market risk. Additionally, the ADR price may not always accurately reflect the underlying value of the foreign company, and there may be differences in accounting standards and corporate governance practices.
- How do I buy and sell ADRs?
ADRs can be bought and sold just like any other security on a U.S. stock exchange. They can be purchased through a brokerage account and traded through a stockbroker.
- Are ADRs a good investment?
Whether or not ADRs are a good investment depends on the specific circumstances of each investment. It is important to carefully consider the risks and potential rewards before making an investment in an ADR. It is also recommended to seek the advice of a financial advisor or professional.