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The trading of Indian Global Depository Receipts (GDR) on London Stock Exchange showed a marked increase in 2017 compared to 2016, which experts said reflects enhanced investors’ interest in one of the fastest growing major economies in the world. The total value traded of Indian GDRs on the exchange’s International Order Book was $4.12 billion last year, an increase of 12.5 per cent compared to 2016 — which recorded $3.66 billion.
The exchange said that the hike reinforces London’s status as the most important international financial centre and India’s funding partner of choice. “The increase in Indian GDR trading on London Stock Exchange in 2017 reflects enhanced overseas institutional investor interest in one of the fastest growing major economies in the world and London’s ability to fund this growth,” said Gokul Mani, the exchange’s newly-appointed Head of Primary Markets — India, Middle East, Africa, responsible for the firm’s listings business across product classes in these markets.
“In launching GDRs or renewing and replenishing existing depository receipt programmes in London, Indian issuers have access to deep liquid pools of multicurrency capital and investors that understand the India equity story,” he said. The increase in Indian GDR trading on London Stock Exchange in 2017 was led by Reliance India Ltd, which recorded a total value traded of $1.49 billion in 2017, compared to $1.23 billion in 2016.
State Bank of India (SBI) recorded an increase of $822 million total value traded in 2017, compared to $470 million in 2016. Similarly, Larsen & Toubro recorded $481 million in 2017 compared to $362 million in 2016 and Reliance Infrastructure recorded $39 million in 2017 compared to $20 million in 2016. The International Order Book (IOB) is London Stock Exchange’s trading platform for Depository Receipts, and it is the main trading venue for the most liquid Indian GDRs.
GDRs are tradeable instruments that have domestic shares as the underlying security and are issued by emerging market companies wanting to raise capital from overseas investors, as well as access a wider international investor base. They are usually subscribed to and traded by foreign investors whose investment charters and policies prevent them from holding or trading emerging market securities on the domestic equity exchanges and trading platforms.
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