Foreign Currency Convertible Bond is a Special type of Bond issued in the currency other than the home currency. In other words, companies issue Foreign Currency convertible bonds to raise,money in Foreign Currency.

American Depositary Receipt (ADR):
ADR (American Depository Receipts) is a dollar denominated negotiable certificate representing a non-US company in US Market which allows the US citizens to invest in overseas securities.

Global Depository Receipt (GDR) :
GDR (Global Depositary Receipt) is an instrument issued abroad by a company to raise funds in some Foreign currencies and is listed and traded on a Foreign stock exchange.

(i) A depository receipt is a negotiable financial instrument issued by a bank to represent a Foreign company’s equity shares or securities.
(ii) They are issued to attract a greater amount of investment from other countries.

Foreign Institutional Investors (FII) :
1. FII can be defined as an investment made by a Non-resident in equity of domestic company without intention of acquiring management control.
2. In other words the investment is made by an individual investor or an investment fund, into the financial markets of another nation.

1. GDRs are issued to investors across the country.
2. It is denominated in any acceptable freely convertible currency.
3. GDR is denominated in any Foreign Currency but the underlying shares would be denominated in local currency of the issuer.
4. The holder is entitled to dividend and bonus on the value of shares underlying the GDR.

The features of ADR as follows:
(i) ADR's are denominated only in US dollars.
(ii) They are issued only to investors who are American residents.
(iii) The depository bank should be located in US.

1. Exploiting Natural Resources:
The FDI companies deplete natural resources like water, forest, mines, etc.
As a result such resources are not available for the usage of common man in the host country.
2. Heavy Outflow of capital:
1. Foreign companies take away huge funds in the form of dividend, royalty fees, etc.
2. This causes a huge outflow of capital from the host country.
3. Not Transferring Technology:
1. Some foreign enterprises do not transfer the technology to developing countries.
2. They mostly transfer second hand technology to the host country.
3. They keep the fundamental aspects of technology with the parent company.
4. In such case, host country may not get the advantage of technology transfer and consequent economic development

1. FCCB is issued by an Indian company in foreign currency.
2. It is a convertible debt instrument.
3. It carries interest coupon.
4. It is unsecured.
5. It can be converted into equity or depository receipt after a certain period.

Importance of International finance:
International finance plays a pivotal role in the international trade and in the sphere of exchange of goods and services among the nations. The following points highlight the importance of international finance.
(i) International Finance helps in calculating exchange rates of various currencies of nations and the relative values of each and every nation in terms thereof.
(ii) It helps in comparing the inflation rates and getting an idea about investing in International debt securities.

Advantages of FDI:
(i) Achieving Higher growth in National Income:
Developing countries get much needed capital through FDI to achieve-higher rate of growth in National Income.
(ii) Help in addressing BOP crisis:
1. FDI provides inflow of Foreign Exchange resources into a country.
2. This helps the country to solve adverse balance of payment position.
(iii) Faster Economic Development:
1. FDI brings technology, management and marketing skills along with it.
2. These are crucial for achieving faster Economic Development of developing countries.
(iv) Generating Employment opportunities:
FDI generates a lot of employment opportunities in developing countries, especially in high skill areas.
(v) Encouraging Competition in host countries:
(1) Entry of FDI into developing country promotes healthy competition therein.
(2) This leads to enterprise in developing countries operating efficiently and effectively in the market.
(3) Consumers get a variety of products of good quality at market determined price which usually benefits the customers.

Foreign currency convertible Bond (FCCB) is a special type of bond issued in the currency other than home currency. In other words, companies issue Foreign Currency convertible bonds to raise money in Foreign Currency.
Features of FCCBs are given below:
1. FCCB is issued by an Indian company in foreign currency.
2. These are listed and traded in foreign stock exchange and similar to the debenture.
3. It is a convertible debt instrument.
4. It carries interest coupon.
5. It is unsecured.
6. It gives its holders the right to convert for a fixed numbers of shares at a predetermined price.
7. It can be converted into equity or depository receipt after a certain period.

Sl.No	Basic for comparison	GDR(Global Depository Receipts)	ADR(American Depository Receipts)
1.	Denomination	It is denominated in terms of any freely convertible currency	It is denominated only in US dollars.
2.	To whom it is issued	It is issued to investors in one or across more markets simultaneously	It is issued only to investors, who are resident of US
3.	Listed in	It is listed in Non-US stock exchange such as London stock Exchange or Luxembourg Stock Exchange	It is listed in American Stock Exchange
4.	Approval	GDR issues does not require Foreign regulatory clearances	ADR Issues require approval from Securities Exchange commission (SEC) of US
5.	Mode of Expression	GDRs are normally co-related to equity shares of the issuing company expressed  in whole numbers	In many cases ADRs co-related to equity shares of the company are expressed as a fraction.
6.	Negotiation	All over the world	In America only.

International finance is a section of financial economics monetary that deals with the, interactions that occur between two or more countries.
Importance of International finance:
International Finance plays a vital role in the International Trade and in the sphere of exchange of goods and services among the nations.
The following points highlight the importance of International Finance.
(i) International Finance helps in calculating exchange rates of various currencies of nations and the relative values of each and every nation in terms thereof.
(ii) It helps in comparing the inflation rates and getting an idea investing in international debt securities.
(iii) It helps in ascertaining the Economic status of the various countries and in judging the Foreign Market.
(iv) Through International Financial Reporting System (IFRS), it facilitates comparison of Financial Statements made by various countries.
(v) It helps in understanding the basis of International organisations and maintaining the Balance among them.
(vi) International Finance organisations such as IMF, World Bank, etc. mediate and resolve Financial disputes among different nations.