ADS (American Depository Shares) Conversion Offer

Introduction: 

Conversion of local shares into American Depositary Shares(ADS) of a company is called an ADS conversion offer.   

The offer allows local (Indian) investors to convert their shares into ADS and sell it in the US markets.   

Key points of the conversion Process: 

  • It is managed by large investment bankers familiar with Indian and global market.  
  • The investment proceeds are distributed among Indian investors.  
  • The proceeds of the sale it in US markets is distributed to Indian investors in rupees after deduction of expenses incurred in the process. 
  • The company under ADS does not issue new shares. Existing shares are converted into ADS.  
  • The scheme can only be used by companies listed on both Indian and American markets.  

Why does the offer given: 

  • To satisfy the demand for ADS traded in US markets. 
  • To allow companies to have new investors. 
  • To create visibility on the US stock exchanges. 
  • To satisfy the US investors by offering an opportunity to sell their shares at a higher price.

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