The stocks of 8 United States (US) based companies will start trading on the National Stock Exchange (NSE) Indian Financial System Code (IFSC) from today; March 3, 2022. The companies that are starting the trade include Tesla, Amazon, Google, Netflix, Meta Platforms (Facebook), Microsoft, Apple, and Walmart making it easier for investors to buy and sell shares in US-based companies.
Reportedly, over 50 companies will be trading on and it is going to start in a phased manner that has begun with the eight companies in NSE IFSC situated in Gujarat International Finance Tech City (GIFT) city. In order to avail the facility of investing in the companies, Indian investors will need to open a Demat account at the IFSC. Offerings to be in the form of un-sponsored depository receipts.
NSE in its circular in August had said,
“This initiative is a first of its kind at IFSC where Indian retail investors will be able to transact on the NSE IFSC platform under the Liberalized Remittance Scheme (LRS) limits prescribed by the Reserve Bank of India (RBI).”
The NSE also stated that it is the initiative that will make international investments easy and affordable for Indian retail investors. The circular further added,
“NSE IFSC Clearing Corporation Limited (NICCL) will offer its robust risk management framework, facilitate clearing and settlement of all trades in depository receipts and provide settlement guarantee in respect to all trades executed on the NSE IFSC platform. Furthermore, all the trades will also be covered under the investor protection framework at NSE IFSC.”
Highlights to be noted:
Notably, the trading of these companies in NSE does not mean they are being listed in India. Rather, it is a derivative product which are NSE IFSC receipts which the NSE IFSC has planned to offer to the Indian investors at lower costs. This means that the Indian investors will no longer need to make their investments in the companies through a broker registered in the US in order to buy the shared of the company.
Buying stock in these companies will also not mean buying the share in the same. Receipts will be made available by the NSE IFSC in a certain ratio.
Following are the share values receipts of the currently listed US companies-
Amazon – 200 IFSC receipts, Alphabet – 200 IFSC receipts, Tesla – 100 IFSC receipts Meta Platforms – 50 IFSC receipts, Microsoft – 50 IFSC receipts, Netflix – 50 IFSC receipts, Apple – 25 IFSC receipts and Walmart – 25 IFSC receipts.
The trading will take place in US dollars with a tick size of $0.01. It means that the investments can be made in the form of $4.45, $4.46, or $4.47 and not in the form of $4.478.
The investors who wish to invest can transact through the Liberalized Remittance Scheme (LRS) limits that are prescribed by RBI and under this RBI permits an individual (resident) to remit up to $2,50,000 in a financial year. The amount currently sits around 1.9 crores in Indian Rupees.
Also, the trading will follow the US timing format beginning from 8 PM in the evening and will go on till 2.30 AM in the night (the next day). The same will be followed for the trading holidays, which again will be based on the US holiday system.
Amazon, Tesla, Alphabet, Meta Platforms, Microsoft, Netflix, Apple, and Walmart are the eight US companies that will be currently available for trading.
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