A large Japanese multinational that has penetrated the US market and a medium-size Indian firm that is mainly selling its products in Asia are considering cross-listing their shares in the US via ADRs that would trade on the NASDAQ. What are the possible motivations why such a move would make sense for the Japanese and the Indian firm?
The possible benefits of doing this are as follows-
1. By cross-listing, the firms' shares trade in multiple time-horizons and currencies which increases the liquidity available to them and provides a greater ability to raise capital.
2. Doing so can provide the Indian firm with a higher corporate standing which can help them get benefits in capital raise and other benefits in business.
3. It might be that the subsidiaries of these companies might be active in the US and hence, listing their might provide them an advantage.
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