Try using [appendToBody]="false" (see the doc)
Now it appears like this. Somewhat dislocated from its expected position.

Works fine with md-dialog component after adding [appendToBody]="false".
@hiteshgupta9193 Can you try the following in your css:
:host /deep/ ng2-dropdown-menu div {
left: inherit !important;
top: inherit !important;
}
Other workaround that works without use[appendToBody] is decrease the z-index of the modal:
.cdk-overlay-container {
z-index: 5 !important;
}
But this can broke your template depending on how you use z-index to other components.
I am also having this issues with bootstrap modal. https://github.com/Gbuomprisco/ngx-chips/issues/355#issuecomment-345896432
Check out the option [zIndex] in version 1.7.5
Most helpful comment
@hiteshgupta9193 Can you try the following in your css:
:host /deep/ ng2-dropdown-menu div { left: inherit !important; top: inherit !important; }