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Why so much difference?

Printed From: The Equity Desk
Category: Market Strategies
Forum Name: Fundamental
Forum Discription: Discuss the operations and finances of any of your companies.Make the other participants aware on the investment opportunities available in a stock on PE free cash flow etc
URL: http://www.theequitydesk.com/forum/forum_posts.asp?TID=565
Printed Date: 04/May/2025 at 8:48am


Topic: Why so much difference?
Posted By: Vivek Sukhani
Subject: Why so much difference?
Date Posted: 08/Nov/2006 at 7:38am
Security Name GDR Price
(USD)		 GDR Price
Date 		Equiv Value
(Rs.)		 Issue Date Issue Size
(USD millions)		 Issue Price
(USD)		 Prem Discount
To IssuePrice (%)
BAJAJAUT(GDR 60.50 07/11/2006 2703.14 31/10/1994 110.00 16.88 258.41
GACL(GDR 2.97 07/11/2006 132.70 30/11/1993 80.00 5.95 -50.08
GRASIM(GDR 61.75 07/11/2006 2758.99 30/06/1994 100.00 20.50 201.21
HINDALCO(GDR 4.20 07/11/2006 187.66 31/07/1994 100.00 16.00 -73.75
ITC(GDR 4.18 07/11/2006 186.76 31/12/1993 68.85 7.65 -45.35
LANDT(GDR 29.80 07/11/2006 665.73 31/03/1996 150.00 15.35 94.13
MANDM(GDR 17.53 07/11/2006 783.24 30/11/1993 74.75 4.46 293.04
RANBAXY(GDR 8.90 07/11/2006 397.65 30/06/1994 100.00 19.38 -54.07
RIL(GDR 58.05 07/11/2006 1296.84 28/02/1994 300.00 11.75 394.04
SBI(GDR 64.50 07/11/2006 1440.93 31/10/1996 369.95 14.15 355.83
Security Name ADR Price (US $) ADR Price Date Equiv Value (Rs.)
DR.REDDY(ADR 17.57 07/11/2006 785.03
HDFCBANK(ADR 70.75 07/11/2006 3161.11
ICICIBK.(ADR 35.45 07/11/2006 1583.91
INFY(ADR 52.26 07/11/2006 2334.98
MTNL(ADR 6.18 07/11/2006 276.12
PATNI (ADR 19.96 07/11/2006 891.81
REDIFF(ADR 16.00 07/11/2006 714.88
SATYAM(ADR 21.20 07/11/2006 947.22
SIFY(ADR 9.09 07/11/2006 406.14
TATA MOT(ADR 18.25 07/11/2006 815.41
VSNLLTD.(ADR 19.91 07/11/2006 889.58
WIPROLTD(ADR 14.23 07/11/2006 635.80
WNS HOLD(ADR 29.20 07/11/2006 1304.66
Can someone please tell how is there so much discrepancy between the ADR prices and CMP on Indian Stock Market? Was perplexed to see some notable names. Kindly help.


Replies:
Posted By: BubbleVision
Date Posted: 09/Nov/2006 at 2:12pm
Vivek have you checked these premium on ADR'S and GDR's with the conversion ratio. In some cases 1 ADR (or GDR) is NOT equal to one local share. (Manishdave can help here)....
 
Even then there is a premium because of the scarcity factor overseas. This premium may have increased in the recent times because of the Bull Run in the markets currently.  


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You can't make money if you are unwilling to lose...It's like willing to breathe in but not willing to breathe out. -- ED SEYKOTA ....Read Disclaimer!

Posted By: manishdave
Date Posted: 09/Nov/2006 at 9:54pm
You are right. For example, ONE ICICIBANK ADR has TWO stocks. But prices are not always equal and sometimes there is premium/discount as much as 35-40%. Reason is general public do not have access to Indian stock so if India is hot, they buy here without checking(or worrying) price in Indian mkt. Another reason is FII limit. If they can not buy stocks there, they would buy ADR/GDR even at premium.
 
There is one difference btn ADR and GDR. Apart from exchange, GDR is only for institutional investors(isn't it funny?). Even if you live in London, and you have 1000,000 GBP you can not buy GRD. ADR is for anybody.

Posted By: Vivek Sukhani
Date Posted: 10/Nov/2006 at 10:39pm
Manish, can you please refewr a site where I can get the information about how many shares are there for a particular co.'s GDR/ADR. Aslo, if they trade at such a premuim does it not represent the appetite for that co.'s stock

Posted By: manishdave
Date Posted: 10/Nov/2006 at 5:43am

 bnyadr.com is good site.

Aslo, if they trade at such a premuim does it not represent the appetite for that co.'s stock

It does, but I won't pay much attention. See this 2 year chart that compare appreciation betn ADR/Indian stock

http://finance.yahoo.com/charts#chart5:symbol=icicibank.ns;range=2y;compare=ibn;indicator=volume;charttype=line;crosshair=on;logscale=on;source - http://finance.yahoo.com/charts#chart5:symbol=icicibank.ns;range=2y;compare=ibn;indicator=volume;charttype=line;crosshair=on;logscale=on;source =

Posted By: BubbleVision
Date Posted: 10/Nov/2006 at 9:42am
Manish can u help me where can we see the BNY ADR index. I believe that there are many sub-country index of the BNY ADR index. Also the ADR'S are classified by Sector. A Link to any of these would help. TIA

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You can't make money if you are unwilling to lose...It's like willing to breathe in but not willing to breathe out. -- ED SEYKOTA ....Read Disclaimer!

Posted By: manishdave
Date Posted: 12/Nov/2006 at 12:42pm

Try this,

 
http://bnyadr.com/adr_index_profile.jsp?symb=16899W20 - http://bnyadr.com/adr_index_profile.jsp?symb=16899W20

Posted By: BubbleVision
Date Posted: 13/Nov/2006 at 6:29pm
Thanks Manish.... that is a really helpful and an interesting website.

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You can't make money if you are unwilling to lose...It's like willing to breathe in but not willing to breathe out. -- ED SEYKOTA ....Read Disclaimer!


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