Q.10. Explain the following
i. Indian Depository receipt
ii. Inter Corporate Deposits
Dear Student
1. INDIAN DEPOSITORY RECEIPTS are rupee dominated instrument issued by any foreign company through a public offer in India . IDR'S can be listed on any indian stock exchange and a single IDR can represent any number of share in the company . Only standard charterd bank can issue IDR in india
2. Inter corporate deposit refers to the unsecured loans provided by one corporate to another. That is, those corporates who have surplus funds lend to other corporates who require funds. Under such a system, the better rated corporate borrow from bank and lend to other corporates (as returns are higher). However, it must be noted that the risk factor is high in this market as this is not well organised and only little information about transactions in the market are known publicly.
Regards
1. INDIAN DEPOSITORY RECEIPTS are rupee dominated instrument issued by any foreign company through a public offer in India . IDR'S can be listed on any indian stock exchange and a single IDR can represent any number of share in the company . Only standard charterd bank can issue IDR in india
2. Inter corporate deposit refers to the unsecured loans provided by one corporate to another. That is, those corporates who have surplus funds lend to other corporates who require funds. Under such a system, the better rated corporate borrow from bank and lend to other corporates (as returns are higher). However, it must be noted that the risk factor is high in this market as this is not well organised and only little information about transactions in the market are known publicly.
Regards