what is GDR and ADR and FDI

a. Global Depository Receipts (GDR's)- These are the receipts issued by depository banks against the shares of a company. For instance, the share issued by the Indian company abroad in order to raise foreign currency. These depository receipts are usually denoted in US dollars and can easily be converted into shares at any point of time. However, GDRs can be listed and traded on the stock exchange of any foreign country other than America.

b. American Depository Receipts (ADR's)- These are receipts of the companies based in the USA. They are usually traded like any other securities in the market; however, such trading is restricted to the American securities markets only. In addition to this, such instruments are sold only to the American citizens.

c. Foreign Direct Investment (FDI)- It refers to investment in a country by people residing or enterprises located in other countries. This can be in the form of investment in the production process in the host country or buying of enterprises in the host country. 

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