Commerce Exam > Commerce Questions > IDRs are issued ina)Indiab)Canadac)Chinad)Non...
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IDRs are issued in
- a)India
- b)Canada
- c)China
- d)None of the options
Correct answer is option 'A'. Can you explain this answer?
Verified Answer
IDRs are issued ina)Indiab)Canadac)Chinad)None of the optionsCorrect a...
Indian Depository Receipt (IDR) is a financial instrument denominated in Indian Rupees in the form of a depository receipt. The IDR is a specific Indian version of the similar global depository receipts. It is 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. The foreign company IDRs will deposit shares to an Indian depository. The depository would issue receipts to investors in India against these shares. The benefit of the underlying shares (like bonus, dividends etc.) would accrue to the depository receipt holders in India.
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IDRs are issued ina)Indiab)Canadac)Chinad)None of the optionsCorrect a...
Indian Depository Receipt (IDR) is a financial instrument denominated in Indian Rupees in the form of a depository receipt. The IDR is a specific Indian version of the similar global depository receipts.
It is 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. The foreign company IDRs will deposit shares to an Indian depository. The depository would issue receipts to investors in India against these shares. The benefit of the underlying shares (like bonus, dividends etc.) would accrue to the depository receipt holders in India.
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IDRs are issued ina)Indiab)Canadac)Chinad)None of the optionsCorrect a...
Introduction:
IDRs, or Indian Depository Receipts, are financial instruments that allow foreign companies to raise capital in the Indian market. They are issued in India and are regulated by the Securities and Exchange Board of India (SEBI).
Explanation:
IDRs are a form of depository receipt that represents shares of a foreign company. They are issued by an Indian depository on behalf of a foreign company and are traded on the Indian stock exchanges. Here is a detailed explanation of why the correct answer is option 'A' (India):
1. Definition of IDRs:
IDRs are financial instruments that represent ownership of shares in a foreign company. They are issued by an Indian depository and are traded on the Indian stock exchanges. The depository holds the underlying shares of the foreign company and issues IDRs to investors in India.
2. Regulatory Authority:
IDRs are regulated by SEBI, which is the regulatory authority for the Indian securities market. SEBI sets the rules and regulations for the issuance and trading of IDRs in India. This regulatory oversight ensures transparency and investor protection.
3. Purpose of IDRs:
The main purpose of issuing IDRs is to allow foreign companies to tap into the Indian capital market and raise funds from Indian investors. It provides an avenue for foreign companies to expand their investor base and raise capital in a different jurisdiction.
4. Listing and Trading:
IDRs are listed and traded on Indian stock exchanges such as the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE). They are subject to the same listing and trading rules as other securities listed on these exchanges.
5. Requirements for Issuers:
To issue IDRs, a foreign company needs to meet certain eligibility criteria set by SEBI. These criteria include a minimum track record, profitability, and compliance with the laws of their home country.
6. Benefits for Investors:
IDRs provide Indian investors with an opportunity to invest in foreign companies without the need to directly purchase shares on a foreign stock exchange. It allows them to diversify their portfolio and gain exposure to international companies.
Conclusion:
In conclusion, IDRs are issued in India and are regulated by SEBI. They provide a means for foreign companies to raise capital in the Indian market and allow Indian investors to invest in foreign companies.
IDRs, or Indian Depository Receipts, are financial instruments that allow foreign companies to raise capital in the Indian market. They are issued in India and are regulated by the Securities and Exchange Board of India (SEBI).
Explanation:
IDRs are a form of depository receipt that represents shares of a foreign company. They are issued by an Indian depository on behalf of a foreign company and are traded on the Indian stock exchanges. Here is a detailed explanation of why the correct answer is option 'A' (India):
1. Definition of IDRs:
IDRs are financial instruments that represent ownership of shares in a foreign company. They are issued by an Indian depository and are traded on the Indian stock exchanges. The depository holds the underlying shares of the foreign company and issues IDRs to investors in India.
2. Regulatory Authority:
IDRs are regulated by SEBI, which is the regulatory authority for the Indian securities market. SEBI sets the rules and regulations for the issuance and trading of IDRs in India. This regulatory oversight ensures transparency and investor protection.
3. Purpose of IDRs:
The main purpose of issuing IDRs is to allow foreign companies to tap into the Indian capital market and raise funds from Indian investors. It provides an avenue for foreign companies to expand their investor base and raise capital in a different jurisdiction.
4. Listing and Trading:
IDRs are listed and traded on Indian stock exchanges such as the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE). They are subject to the same listing and trading rules as other securities listed on these exchanges.
5. Requirements for Issuers:
To issue IDRs, a foreign company needs to meet certain eligibility criteria set by SEBI. These criteria include a minimum track record, profitability, and compliance with the laws of their home country.
6. Benefits for Investors:
IDRs provide Indian investors with an opportunity to invest in foreign companies without the need to directly purchase shares on a foreign stock exchange. It allows them to diversify their portfolio and gain exposure to international companies.
Conclusion:
In conclusion, IDRs are issued in India and are regulated by SEBI. They provide a means for foreign companies to raise capital in the Indian market and allow Indian investors to invest in foreign companies.
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