Kavitha Menon's Blog

A Depository Receipt is a type of negotiable (transferable) financial security that is traded on a local stock exchange but represents a security, usually in the form of equity, that is issued by a foreign publicly listed company.( Source: www.investopedia.com ). An I DR (Indian Depository Receipt) is issued by a foreign company raising funds from the Indian market. IDRs are rupee-denominated and created by a domestic depository against the underlying equity shares of a foreign company. Sounds complicated? Let’s explain with a live example from our markets. Very recently Standard Chartered Bank which is a foreign company listed in the UK issued its first IDR in India. Effectively it purchased its own shares listed in UK ,deposited the same with a custodian -The Bank of New York Mellon ,on behalf of a Indian depository which is Standard Chartered Bank, Mumbai and against every 1/10 Standard Chartered share issued 1 IDR to Indian investors . Thus the Indian investor does not direc...

Its getting pretty hot out here ! . You would agree that our stock markets have caught the fancy of the entire globe . Every fund worth its name wants to increase allocations to our country. The results are showing, with equity valuations going into expensive territory. For value investors, these are difficult times. What does one do with funds allocated towards equities in such times ?. While parking money in debt investments is never a bad idea , another option is to look for value in equities other than in India . We are speaking about international equity investments. Post the 2008 correction, the current rally hasn’t been uniform across international markets . India has infact been one of the best performers in the ongoing rally while markets like China are still far away from the peak levels of 2007. Both developed and emerging markets would have a range of stocks that could be available at much better valuations than their Indian counterparts. For example - just like...