From Netflix To Apple: NSE IFSC To Start Trading 8 US Stocks From Today

In big news for Indian retail Indian investors who are keen to invest in US stocks, NSE IFSC, a subsidiary exchange of the National Stock Exchange, will begin trading 8 prominent US stocks, including Amazon, Tesla, Alphabet, Meta Platforms, Microsoft, Apple, Netflix and Walmart, from today (i.e.3rd March 2022).

To make things simpler, answered here are some questions surrounding this big move by NSE IFSC.

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Does this mean US stocks are being listed in India?

No. It is a derivative product, i.e. the NSEIFSC Receipts will be offered to Indian investors at a low cost. So, Indian investors will not need to route their investments through a broker registered in the US to buy shares of companies like Amazon, Netflix, Apple, Tesla etc, as per an ET report.

What are NSEIFSC Receipts?

To make US stocks accessible to Indians, market makers will buy shares in the US and issue receipts against them, which will be known as ¡®NSEI Receipts¡¯. These receipts will be equivalent to owning a stake in the company whose receipt they will be.

Just as you would buy or sell shares of the companies in the stock market, you can buy or sell these receipts as well.

Does the NSEIFSC receipt imply ownership of the US stock?

No. NSE IFSC said it will release the receipts in a certain ratio that varies for different companies¡¯ stocks. For example, one share of Tesla will be equivalent to 100 NSE IFSC receipts. That means the value of Tesla¡¯s receipt will be about one-hundredth of the value of Tesla shares.

What will be the currency of trading US stock receipts?

NSEIFSC Receipts on US Stocks will be traded in US dollars. The ticket size will be one cent, that is, $0.01. That means you will be able to bid for the receipts in the form of $6.62, $6.63, $6.64 and so on, but not $6.632.

How much can one invest via NSEIFSC receipts?

As per LRS limits prescribed by RBI, Indian retail investors can remit up to $2,50,000 per financial year. That is approximately ?1.9 crore according to the current conversion rate.

What will be the trade timings for these US receipts?

Trading in these receipts will follow US trade timings. It will begin at 8 pm in the evening and continue till 2.30 am in the night on the next day. Investors who have trading and Demat accounts with NSE IFSC registered brokers can trade in these receipts.

Will more US stocks be available?

The plan is to extend this list to 50 US stocks in a phased manner. Some of these will include Adobe, Berkshire Hathaway, Mastercard, Visa, Morgan Stanley, Paypal and JP Morgan.

Also Read: Types Of Risks That Every Stock Faces In The Stock Market

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