Home Featured Now You Can Directly Invest In International Stocks Through NSE IFSC; Check The Procedure Here

Now You Can Directly Invest In International Stocks Through NSE IFSC; Check The Procedure Here

by Shatakshi Gupta

With the increasing purchasing power of Indian investors, they are nowadays, looking for investment beyond the country’s boundaries. The top-rated multinational companies have always been a lucrative investment, but till now investment in foreign companies was a complex procedure. However, now the country’s largest stock exchange NSE has given great news to Indian investors. NSE has allowed making money by investing in the top 8 companies of the USA. In the coming time, many more international companies will be added to this list.

Which companies are available for investment?

NSE was planning for this for a long time. As of now, investment is allowed only in 8 giants, viz. Microsoft, Amazon, Google’s parent company Alphabet, Facebook’s parent company Meta Inc., Netflix, Walmart, and Tesla. In the coming time, there is going to be an opportunity to invest in 42 other big companies in the USA. In this way, soon Indian investors will be able to invest money in America’s top 50 companies sitting without going through alternate routes.

How can you invest directly in these companies?

Also read: Understand the new T+1 settlement system of BSE and NSE

India had started the Gift City some time back for investment in foreign stock exchanges. GIFT City located in Gujarat is a kind of Global Financial Hub. NSE had formed a subsidiary a few years back to give Indian investors access to foreign stock exchanges under the name NSE International Exchange.

Depository receipts will be issued against the shares of American companies through NSE IFSC. To invest money in these companies, investors will have to open a separate Demat account in NSE IFSC. An Indian investor will be able to invest up to a maximum of INR 1.9 crore in these companies.

Will be able to buy high-priced shares with little money:

If the share value of American companies is high, then it is not accessible to ordinary retail investors.  For example, company X shares trade at $1000 today. In Indian currency, it becomes more than Rs 76,000. NSE has also solved this problem. There will be 100 Depository Receipts issued for 1 share of company X on NSE IFSC. In this way, according to the current value, the price of 1 receipt will be around Rs 760. Indian investors will be able to get a chance to become a company X shareholder even by investing just Rs 760 in this way.

Procedure to invest:

  • An Investor needs to open a Demat account with a depository in GIFT City. Investors should check whether their broker is a participant in the depository.
  •  At present, there is only one depository in GIFT City in which NSE, BSE, Multi Commodity Exchange of India, National Securities Depository and Central Depository Services (India) are jointly owned.
  • After this, one has to open a trading account with the broker member of NSE IFSC.
  • While investing, an investor will not get a share but the DRs (Depository Receipts) in return for his investment. Which will be deposited in the Demat account of the investor.
  • Any type of corporate action eg. Dividend distribution, declared by the companies, will be credited in the investor’s account in proportion to his DRs holding.  However, investors will not have any voting rights on such investments.

Also read: Why ETFs Are Better Than Sector-Specific Or Index-Linked Mutual funds?

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