Know everything about NSE IFSC – a first of its kind product by NSE for Indian retail investors to invest in US stocks directly
NSE IFSC is a first of its kind product by NSE for Indian retail investors to invest in US stocks.
What is NSE IFSC?
NSE International Exchange, commonly known as NSE IFSC, is a subsidiary of the National Stock Exchange. NSE started an initiative on Thursday, 3rd March 2022, wherein Indian retail investors can invest in US stocks.
Indian retail investors can only invest in 8 US companies such as Alphabet (Google), Tesla, Apple, Amazon, Meta (Facebook), Microsoft, Netflix, Walmart.
However, the companies’ stock price is in USD terms, and when doing a conversion in Indian Rupees, each share can be of high value.
For example, Tesla is currently trading at ~$840, and if you multiply it by 75, the price of each share becomes more than ₹60k.
NSE IFSC Receipts aims to make the entire process of investment in global stocks easy, and so NSE IFSC has allowed the fractional purchase of shares, and they call it Receipts.
So, in short, you can purchase 1/100th of a Tesla share. So one can even invest ~₹600 in Tesla.
How to Enable NSE IFSC?
Depositories, banks and brokers have to start offering an option to enable NSE IFSC account.
One can invest by buying unsponsored depository receipts (DR) for the US stocks. NSEIFSC will buy the US shares on your behalf and issue receipts.
Around 40-45 broking firms are in the process of setting up their operations with NSE’s IFSC.
Investors can buy or sell these NSE IFSC receipts during US trading hours, from 8 PM to 2:30 AM in India.
Moreover, investors will be entitled to corporate actions like dividends, bonus shares etc.
You have to check with your broker and ask when they will provide an option for NSEIFSC.
Wait and Watch
My advice to everyone will be to wait and watch. US markets have been in the solid bull for the past few years, especially the tech stocks.
In 2022, they started correcting. So you will have ample amount of time to invest in great companies at a value.
By that time, your broker will be ready to offer you NSE IFSC Receipts as well.
So, though we can theoretically invest in US companies, you don’t need to start as soon as you have been given a choice to do so.
Wait and watch for the product to become available under all brokers for everyone. Let us have more options to invest in undervalued US stocks, and then one can consider it.
We have already missed the first trillion-dollar opportunity. There is no FOMO or fear of missing out. So, I am not in a hurry to consider the NSE IFSC option right now.
Are you willing to wait and watch, or do you want to jump right in right now?
We can Find better Opportunities in Indian Market , I will Invest In Indian Stocks rather than buying US Stocks in Fractions
Yes. We have much better economy than the US but tech in the US is much better and so one can always consider it.
Yes correct. We have to read and understand all pros and cons while purchasing US stocks.
Yes, always.
Sir, What about the brokerage and govt taxes
Brokerages when they allow an option will share what brokerage they are charging for it. Taxation as of now should be same as LTCG and STCG but still needs more clarification on it.
Yes I think we need to wait and watch as we need to know what will be the dividend distribution for stocks held in fractions.
Not clear yet but I think it will be in proportion to the receipts held in your demat account.