% | $
Quotes you view appear here for quick access.

ICICI Bank Ltd. Message Board

  • dsingh798 dsingh798 Aug 21, 2007 9:27 AM Flag


    Some banks or financial institutions buy stocks of ibm from india and sell it here.this is whay adr means

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • ADRs were introduced as a result of the complexities involved in buying shares in foreign countries and the difficulties associated with trading at different prices and currency values. For this reason, U.S. banks simply purchase a bulk lot of shares from the company, bundle the shares into groups, and reissues them on either the New York Stock Exchange (NYSE), American Stock Exchange (AMEX) or the Nasdaq.

      In return, the foreign company must provide detailed financial information to the sponsor bank. The depositary bank sets the ratio of U.S. ADRs per home-country share. This ratio can be anything less than or greater than 1.
      In case of IBN this ratio is such that 2 INDIAN ICICI stock is equivalent to one ADR.

      One IBN ADR = 2 Indian stocks

      This is done because the banks wish to price an ADR high enough to show substantial value, yet low enough to make it affordable for individual investors. Most investors try to avoid investing in penny stocks, and many would shy away from a company trading for 50 Russian roubles per share, which equates to US$1.50 per share. As a result, the majority of ADRs range between $10 and $100 per share. If, in the home country, the shares were worth considerably less, then each ADR would represent several real shares.

7.810.00(0.00%)Sep 27 4:03 PMEDT