Between May 1992 and June 2001, 72 Indian companies tapped the international capital markets with their equity offerings in the form of Depositary Receipt (DR) programs. Initially, most of these programs were in the form of Global Depositary Receipts (GDRs) and were traded on London and Luxembourg stock exchanges. Since 1999, many Indian companies have been listing their American Depositary Receipts (ADRs) on the US stock exchanges.

Home market responses to issuance of DRs are of interest to the policy makers, investors, market intermediaries, CFOs, and finance scholars. Policy makers in emerging markets are increasingly concerned about the consequences for the domestic equity market when companies list stocks abroad. The present paper assesses the impact of listing of ADRs/GDRs on the returns of the firm's underlying domestic shares by using a sample of 68 Indian DR programs that listed on the foreign markets between January 1, 1996 and June 30, 2001.

We recorded that the impact on the returns available from the underlying domestic shares depends on the listing venue of the DR programswhile the GDR listings adversely affect the returns, ADR listings do not seem to have any significant impact on the returns available from the underlying domestic shares. Our results are similar to the results recorded in the similar studies conducted with foreign listings from the other emerging economies.

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