Why GDRs of an Indian Company would trade at discount on Foreign Exchanges? Sometimes as much as 50+% discount? Now this gap is closed approx. a week ago.
e.g. Each GDR of GAIL India is equivalent to 6 Ordinary Shares.
Earlier it used to trade at 30% discount on London Stock Exchange compared to GAIL trading on Indian Stock Exchanges. This difference vanished after 4th Oct 2022. Previously this occurred on 1st August 2008.
Why this discrepancy? What piece of information I am missing here?
It should not be because of Split/Bonus Issuance as Bonus Share were issued on 6th Sept 2022 whereas the GDR price adjustment occurred on 5th Oct 2022. Also on earlier Bonus Issuance there was no such closing of gap.
