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Question : Case Study: PQR Enterprises - Funding Strategies for Diversification

PQR Enterprises is a well-established conglomerate planning to diversify its business operations. The company is evaluating various sources of business finance to support its diversification plans.

Questions : Debentures and Financial Instruments

PQR Enterprises is considering issuing IDR. What purpose does an IDR serve?

Option 1: It raises funds in the domestic market
   

Option 2: It allows foreign companies to invest in India
  

Option 3: It enables Indian companies to raise funds abroad

  

Option 4: It ensures dividend payments to preference shareholders


Team Careers360 12th Jan, 2024
Answer (1)
Team Careers360 15th Jan, 2024

Correct Answer: It enables Indian companies to raise funds abroad

  


Solution : The correct answer is (c) It enables Indian companies to raise funds abroad

IDR stands for Indian Depository Receipts. An IDR is a financial instrument denominated in Indian Rupees and issued by a domestic depository in India. It allows Indian companies to raise funds from international investors in the form of depository receipts. This mechanism enables Indian companies to tap into international capital markets without directly listing their shares on foreign exchanges.

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