When a Indian company taps the global equity market to raise foreign equity fund through listing on the stock markets there, it is called equity funding through depository receipts. They do not appear in the books of accounts of the issuing company directly. They are called depository receipts because all the new shares issued in foreign currency are kept with the depositary in that foreign country. The depository receipts trade on foreign exchanges in the same way shares of the companies are traded on Bombay Stock Exchange. There may be an over- the- counter market, too. These equities, also called Euro equity, represents shares that are denominated in a foreign currency and are issued by non-American/non-European companies such as Indian companies. These shares are then listed on American and European stock exchanges by complying to their regulations.

There are four types Euro equity issues:
Global Depository Receipts (GDR)
American Depository Receipts (ADR)
European Depository Receipts
Singapore Depository Receipts

These types indicate where they are issued and where they can be traded. The American Depository Receipts are the most popular.
When are depository receipts used to get equity funding? The companies issue depositary receipts if they have a very large client base in that geography. It serves as a marketing tool. It provides the international visibility and the discussions about the investment in the company among the global investor take the company to a different league. Also, the folders of depository receipts do not have any voting rights taking away the risk of interference.

Companies can raise funds via different methods/modes listed above. Apohan carries out professional, end-to-end, customized consultancy services for above classification of modes of issue of equities to achieve the objectives of the client business. Apohan carries out all these equity transactions, right from the problem identification phase, to the closure of deal with perfection.