To boost the Indian economy, the Central government has allowed direct listing of Indian companies in foreign exchanges. However, before the listing happens, a few things have to be taken care of, like the amendment of Section 23 of the Companies Act 2013. Moreover, the companies need to meet specific criteria to get directly enlisted on foreign exchanges—average profit in the last three years, paid-up share capital, the value of the company’s tangible and intangible assets, etc.

As this is still a work in progress, Indian companies can enter the overseas capital market via ADRs and GDRs. The full forms of GDR and ADR are Global Depository Receipts and American Depository Receipts, respectively.

American Depository Receipts (ADRs) And How Do They Work?

Indian companies wishing to raise money from the American market can enlist their shares on American Stock Exchange. Since an Indian company cannot directly issue its shares in a foreign stock exchange, ADR is a means by which Indian companies draw American investors and their capital. ADRs enable trading non-American shares in American exchanges.

Two types of ADRs are:

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  • Sponsored ADRs: Existence via an agreement between a non-American company and an American financial institute/ bank
  • Unsponsored ADRs: Existence without the involvement of the non-American company

These are further sub-categorized as Type I, II, and II.

How Do ADRs Work?

The company provides an American financial institution with its shares. The bank holds the shares as inventory and acknowledges them through a certificate called ADR. This represents the company’s share in the American stock market and is listed in NASDAQ or New York Stock Exchange and traded over-the-counter. After that, shares are valued and transacted in dollars. Each ADR comprises a specific number of shares as deemed fit by the depository bank—One ADR could mean one share, multiple shares, or a fraction of a share. If an investor in America purchases shares of an ADR-listed Indian company, he buys the ADR issued to that company against the shares in question. Then, the ADR is converted into the same number of shares. The investor obtains the dividend and capital gain in American dollars.

The company has to provide the bank with detailed financial information for the benefit of American investors. Also, the value of the company’s shares in the Indian market is closely monitored because of the buying/ selling of the same shares simultaneously in different markets (arbitrage).

Global Depository Receipts (GDRs)  And How Do They Work?

It’s only through GDR that an Indian company can make its shares available in different global exchanges. It is a negotiable certificate that helps Indian companies raise funds by trading their shares outside India. Its two types are:

  • Rule 144A: Allows trading shares of non-American companies in the American market based on 144A of SEC. The trading cost is lesser than that in Type III ADRs.
  • Regulation S: Allows non-American companies to jack up funds from European markets only. 

For instance, an Indian company can agree with a financial institute/bank of London. The custodian bank holds the company’s shares against GDR issuance. The bank, in turn, enrols the stocks of the company in London Stock Exchange. The bank facilitates the entire transaction. One GDR can represent one share or multiple shares or a fraction of a share. This is generally decided by the depository bank depending on what will appeal to the investors.

The value of the company’s shares in the Indian market is closely monitored because of arbitrage. GDR transactions in a global market have lower costs than other similar mechanisms.

What Is Direct Listing? How’s It Different From ADRs And GDRs?

In a direct listing, a domestic company can enlist itself with the stock exchanges of other countries without an intermediary. Unlike ADRs and GDRs, the Indian company can directly offer their shares in foreign markets instead of giving them to a foreign depository bank.

Direct listing excludes intermediaries, decreases the overall transaction cost, and increases transparency. However, a direct overseas listing of Indian companies hasn’t yet been implemented.

List of Indian companies having ADR and GDR: (i.e., ADR and GDR India)

List of Indian companies listed overseas (ADR):

  • Dr Reddy’s Lab
  • Eros International PLC
  • Genpact Ltd.
  • HDFC Bank
  • ICICI Bank
  • Infosys Ltd.
  • MakeMyTrip Ltd.
  • India Ltd.
  • Sify Technologies Ltd.
  • Tata Motors
  • Vedanta Ltd.
  • Videocon D2H Ltd.
  • Wipro
  • WNS (Holdings) Ltd.

Some of the foreign listing Indian companies (GDRs):

  • ABL Bio-Technologies Ltd. (Luxembourg) 
  • Accentia Technologies Ltd. (Singapore) 
  • Aditya Birla Nuvo (Portal)  
  • Aftek Infosys Ltd. (Luxembourg) 
  • Amtek Auto Ltd. (London) 
  • Apollo Hospitals Enterprise Ltd. (Portal) 
  • Asahi Infrastructure & Projects Ltd. (Luxembourg)
  • Bag Films & Media Ltd. (Luxembourg) 
  • Bajaj Auto Ltd. (London) 
  • Bajaj Finserv Ltd. (London)

So, these are some of the famous Indian companies listed outside India.


When Indian companies are listed in foreign exchanges, it gives rise to an alternate source of capital, better valuation, a diverse conglomeration of investors, a broader investor base, international brand recognition, foreign currency generation, and more.


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