NSE IFSC to start trading 8 premium US stocks from tomorrow
Indian investors will now be able to invest in shares of US-based companies like Amazon, Tesla, Alphabet, Meta Platforms, Microsoft, Netflix, Apple and Walmart, starting March 3.
NSE IFSC exchange, a subsidiary exchange of the National Stock Exchange, has been approved by the market regulator to establish an international exchange in GIFT - International Financial Service Centre (IFSC) Gandhinagar.
Unlike before, when the investors needed to route their investments through a broker registered in the US to buy shares of Tesla or Netflix, market makers will buy shares in the US and issue receipts against them, which will be known as NSEIFSC Receipts, which the investors will be able to buy and sell through NSE IFSC registered brokers, according to an ET report.
Prior to this, they should open trading and demat accounts with NSE IFSC registered brokers and transfer funds from their local bank account to the broker’s bank account. Once the fund reflects in the broker's account, one can start trading in NSE IFSC US stocks, according to Motilal Oswal, the report said.
Presently, 36 brokers are registered with the exchange, it added.
According to the report, buying the receipts will be equivalent to owning a stake in the company whose receipt they will be, stated an Economic Times report.
However, NSE IFSC said it will release the receipts in a certain ratio, the report said adding that one share of Tesla will be equivalent to 100 NSE IFSC receipts while one share of Amazon will be equivalent to 200 IFSC receipts.
Ratios for other six stocks are Alphabet (200), Meta Flatforms (50), Microsoft (50), Netflix (50), Apple (25) and Walmart (25), it added.
Further, NSEIFSC Receipts on US Stocks will be traded in US dollars and the tick size will be one cent, that is, $0.01
The tick size is the smallest price increment in which the prices are quoted.