Indian investors can now trade in eight US stocks via NSE IFSC. This platform allows Indians to invest in US stocks at a low cost as an additional investment opportunity.
The eight US stocks trading on the exchange include Amazon, Tesla, Microsoft, and Alphabet.
March 3 marks a new chapter for the Indian stock market, as eight US stocks trade via NSE IFSC.
How can Indian investors use NSE IFSC receipts?
While Indian investors can buy and sell US stocks, they would not list in India, and stocks will present as unsponsored depository receipts.
The method allows market makers to buy shares in the US and issue their receipts.
The issued receipts are known as NSE IFSC receipts. Furthermore, investors will use the NSE IFSC receipts for trading transactions through NSE IFSC’s registered brokers.
Previously, Indian investors would go through a US-registered broker to buy shares of US entities.
Indian Investors can trade in eight US stock
The eight US stocks Indian investors can now trade in are – Walmart Inc (WMT), Alphabet Inc (GOOGL), Amazon Inc (AMZN), Meta Platforms (FB), Netflix Inc (NFLX), Tesla Inc (TSLA), Microsoft Corp (MSFT), and Apple Inc (AAPL).
Furthermore, while the number of tradable stocks will increase in phases, approximately 50 largest US entitles can trade with Indian investors.
Among the 50 stocks soon to be listed on the NS IFSC include Berkshire Hathaway, JP Morgan Chase, Mastercard, PayPal, Intel, Pepsico, Pfizer, and Nike.
However, the date for listing the stocks is undecided.
Will Indian investors get ownership in US stocks?
Indian investors can start trading US stocks by opening a trading and demat account with an NSE IFSC registered broker.
Furthermore, the NSE IFSC receipts grant ownership, meaning a particular entity’s number of receipts is equivalent to owning a proportional stake in the company.
The NSE further explained that receipts of approved companies would release in specific ratios.
For instance, one share of Alphabet and Amazon is equivalent to 200 NS IFSC receipts each, while one Tesla share equals 100 NSE IFSC receipts.
Additionally, one share of Apple and Walmart is equivalent to 25 receipts each, while one share of Netflix, Meta Platforms, and Microsoft is equivalent to 50 NSE IFSC receipts.
Benefits of Indian investors trading in US stocks
Head, Equity Strategy, Broking and Distribution, Motilal Oswal Financial Services Ltd, Hemang Jain, said, “Investors get the option to trade in fractional quantity/value when compared to the underlying shares traded in US markets.”
Furthermore, Indian investors can hold depository receipts in their demat accounts opened in GIFT City.
Additionally, the investors are entitled to corporate action benefits pertaining to the underlying stocks, added Hemang Jain.
Lastly,
Indian investors trading in US stock via NSE IFSC marks an important chapter. The eight US stocks listed on NSE IFSC open doors for large US entities to list as tradable stocks.
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