On Monday 27 July 2009, two new Global Depositary Receipts (GDRs) were admitted to trading on the Luxembourg Stock Exchange.
Both of these new listings originated from companies in India, a country in which the Luxembourg Stock Exchange is well known for its GDR activities. The admission to trading of the two GDRs means that the Luxembourg Stock Exchange has listed a total of eight new GDRs so far in 2009.
The first of Monday’s listings was for Suzlon Energy Limited, a company specialised in wind energy. Its issue comprised of 14,600,000 Global Depositary Receipts (ISIN: US86960A1043) representing 58,400,000 equity shares of the company; allowing it to raise USD 127 million for general purposes. The other listing was for The Tata Power Company Limited, one of the largest private sector electricity generators in India, which issued 14,838,110 Global Depositary Receipts (ISIN: US8765664078) each representing one equity share of the company. The proceeds of the issue, amounting to USD 378 million, will be used to fund capital expenditure of its existing power plants and future projects.
A GDR is an instrument that represent shares in the underlying issuing companies and are particularly useful for companies in emerging markets by enabling them to have access to foreign capital markets. For investors, mainly institutional, GDRs are often the simplest means to invest in a specific share without buying them at local level. The Luxembourg Stock Exchange was first European exchange to list a GDR and has experience in depositary receipts going back to the 1960’s.