How to get ADR shares converted to Ordinary Equity Shares
ADS (American Depository Shares) will be converted to Ordinary Equity shares, in the event of a an Indian Company listed in Foreign Stock Exchange, getting delisted. This occurred when Tata Motors got delisted from New York Stock Exchange and the holders of these shares in ADS (American Depository Shares) get an option to cancel ADSs and convert the same to Ordinary Shares. Now how to go about doing such things?
1) Set up a DR-Type Demat, Ordinary Demat & Trading account in India
2) Complete the formalities in US to initiate the conversion
3) Fill and Submit Receipt in DIR provided by us (the Depository Participant)
4) Transfer the relevant charges as mentioned by Citi
Let's see each of them in detail
TABLE OF CONTENTS
- Set up a DR Type Demat account, Normal Demat and Trading account
- Complete the formalities in US to convert to Ordinary shares
- Submit the Receipt-In DIR
- Payment of Charges
DR type demat account is opened for the purpose of enabling investors to separately hold Equity shares issued upon cancellation of Depository Receipts (GDR/ADR). This therefore, can be operated only to receive credit of such shares. Once the ordinary shares are received these can be transferred to Normal demat account and the DR type account can be closed.
Click here to Set up an account
Complete the formalities in US to convert to Ordinary shares
You would have received intimation about the contact points to initiate the process. Please get in touch with them to start the process.
Submit the Receipt-In DIR
DR type demat accounts cannot have Standing Instruction enabled. Standing Instruction for a demat is required to in order receive credit of shares from other accounts. As the Standing Instruction cannot be enabled for DR type accounts, a receipt in DIR (as seen below needs to be provided). Just fill the DP ID, DP Name, Client ID, ISIN, Stock Name and Quantity. Some more details are given below for easy reference
DP ID - this is the source DP ID from where the shares are going to be transferred
DP Name - Name of the Depository Participant transferring the shares
Client ID - this refers to the source Client ID from where the shares are going to be transferred
ISIN - This refers to International Securities Identification Number and can be taken from NSE website by keying in the name of the company
If you need help in getting the DP ID, DP Name, Client ID and ISIN, we will help you with this.
Payment of Charges
There are off market charges which needs to be paid to Citi (in case of Tatamotors ADSs conversion)and these can be either transferred directly to their bank account or can be transferred to your Trading account with us and we will transfer it with Citi. These charges are payable in Indian Rupees and subject to change on a daily basis as they are determined based on the last close price of the stock.
Once the payment is done and Receipt-in DIR is entered into the system, the shares transferred by the transferring agency will be received in your DR-type demat account. You may subsequently transfer these shares from DR-type demat account to your normal demat account and close the DR type account. These shares can be sold whenever you want later.
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