Indian ADRs Alert! Why Infosys, Wipro, HDFC Bank, ICICI Bank, Dr Reddy's Lab Will Be In Focus On February 13?

Indian American depositary receipts (ADRs) that are traded on Wall Street will be in focus as PM Narendra Modi makes his visit to the US. His trip is significant and is expected to strengthen bilateral ties under Donald Trump's 2.0. Accordingly, Indian ADRs will be trending on February 13. These ADRs are of large-cap companies that are heavyweight on BSE and NSE.

Who are they? The Indian biggies are Infosys, Wipro, ICICI Bank, HDFC Bank and Dr Reddy's Lab whose ADRs trade in US market.

Other Indian ADRs are --- Zoomcar Holdings, Lytus Technologies Holding, MakeMyTrip, Roadzen, Yatra Online, WNS Holdings, Sify, Azure Power Global and Reliance Industries. However, Reliance depositary receipt traded in the European market.

Indian ADRs Performance Before PM Modi-Trump Meeting:

The meeting between the two leaders is scheduled on February 13.

On February 12th, Infosys and Wipro ADR fell sharply by 1% and 1.4% respectively. While ICICI Bank and HDFC Bank ADRs were down by 0.6% to 0.7%. Dr Reddy's Labs ADR was broadly flat, while MakeMyTrip ADR was down marginally. However, WNS Holding ADR dipped by 2.6%.

On the other hand, Lytus and Zoomcar ADR surged by 0.71% and 23% respectively. Yatra Online was up 2%, while Sify gained 6.3%. Noteworthily, Azure Power's ADR skyrocketed by more than 52%.

What Are ADRs?

An ADR is a security that represents shares of non-U.S. companies that are held by a U.S. depositary bank outside the United States ("U.S."). ADRs allow U.S. investors to invest in non-U.S. companies and give non-U.S.-companies-easier-access to the U.S. capital markets. Many non-U.S. issuers use ADRs as a means of raising capital or establishing a trading presence in the U.S.

These ADRs plunged after Sensex and Nifty witnessed extreme selling pressure on Wednesday before ending at a gap-down. Sensex holds 76,170 levels, while Nifty is around 23,045 mark.

What do experts say?

PM Modi's visit comes at a time when Trump has been imposing stringent tariff plans on major economies. At the latest, on February 11, the US withdrew all country-specific duty exemptions on steel imports given under Section 232 of the Trade and Expansion Act of 1962, with effect from March 12, 2025. This removes all preferential market access given in the form of tariff waivers or tariff exemption volume quotas to countries like Canada, Brazil, the European Union (EU), Mexico, South Korea, Japan, Argentina, Australia, and Ukraine.

Brokerage ICRA cited that such exemptions had enabled these select countries to garner around 75-80% of the US steel import basket in recent years. However, a month from now, all steel imports by the US will be treated on an equal footing, as the 25% tariff levied on steel (under Section 232) becomes uniformly applicable to all countries.

India is expected to face the brunt of Trump's latest tariff on steel and aluminium. Hence, relief in tariffs from Modi and Trump's upcoming meeting is highly anticipated.

On February 12, Dr V K Vijayakumar, Chief Investment Strategist, at Geojit Financial Services said, Trump's tariff tantrums have been impacting the markets for the last several days. Trump moving away from targeting specific countries like Mexico, Canada and to a lesser extent China, and moving to import tariffs on steel and aluminium on all countries, has aggravated the concerns. The European Union's declaration that they will retaliate with counter-tariffs has raised the probability of a full-blown trade war. How this will pan out remains to be seen.

Vijayakumar added, It is important to understand that President Trump, however powerful he might be, cannot manipulate the laws of economics. When higher tariffs raise the inflation in the US and the Fed responds hawkishly, the US stock market will crash. This will restrain Trump. But it will take some time. Meanwhile, the drama and the volatility in the market will continue.

Any decision between Modi and Trump to strategically strengthen India-US cooperation will play a key role in both Indian and US market including ADRs.