New Delhi: The NSE IFSC said trading would begin in eight US-based stocks from March 3. Trading meant that stock trading would be in the form of unsupported deposit receipts. The exchange has approved the top 50 US-based stock receipts’ trading receipts, including Apple, Alphabet, Amazon, Tesla, Microsoft, Morgan Stanley, Nike, P&G, Coca-Cola, and Exxon Mobil.
However, only eight will be available from Thursday. These include Amazon, Apple, Alphabet (Google), Netflix, Tesla, Meta (Facebook), Walmart, and Microsoft.
Does this mean that U.S. stocks are listed in India?
No. It is a by-product – NSEIFSC Receipts – an NSE IFSC exchange that will provide Indian investors at a lower cost. Now they will not need to invest their money in a U.S. registered trader to buy shares in Tesla or Netflix.
The NSE IFSC exchange
It is a Fully-owned company of the National Stock Exchange of India (NSE). It has obtained approval from the market regulator to establish an international exchange through GIFT – International Financial Service Center (IFSC) Gandhinagar.
In exchange, trading is allowed on shares of companies affiliated outside India, deposit receipts, securities of qualified issuers, currency type, index, interest rate and non-agricultural expenditure. It is an exchange that will provide an alternative trade.
NSEIFSC Receipts
To make U.S. stocks accessible to Indians, market makers will buy U.S. stocks and issue receipts against them, known as NSEIFSC Receipts. They will be equal to having a share in the company, their ticket.
You can buy or sell these receipts just as you would buy or sell shares of companies.
Stocks will these receipts be available from March 3
As of Thursday, eight shares will be represented on their receipts. Amazon, Tesla, Alphabet, Meta Platforms, Microsoft, Netflix, Apple and Walmart.
The plan is to extend the list to 50 U.S. stocks, including Adobe, Berkshire Hathaway, Mastercard, Visa, Chevron, Morgan Stanley, PayPal and JP Morgan. The trading day will be determined for this and the rest in due course.
The NSE IFSC said it would issue receipts at a specific rate. For example, one Tesla share will equal 100 NSE IFSC receipts. One Amazon share will be equal to 200 IFSC receipts. That said, Tesla’s receipt amount will be about one hundred per cent of Tesla’s share of shares.
Ratings for the other six stocks available for trading from Thursday are: Alphabet (200), Meta Flatforms (50), Microsoft (50), Netflix (50), Apple (25) and Walmart (25)
The currency of trading U.S. stock receipts
NSE IFSC Receipts in US Stocks will be sold in U.S. dollars. The size of the tick will be one cent, that is, $ 0.01. That means you will be able to bid receipts in the form of $ 6.62, $ 6.63, $ 6.64 and so on, but not $ 6.632.
Commercial Indian investors will work together on the NSE IFSC platform under the Liberalized Remittance Scheme (LRS) limits set by the Reserve Bank of India (RBI). Under the LRS framework, the RBI allows residents to withdraw up to $ 2,50,000 per financial year. That is estimated at Rs 1.9 crore according to the current conversion rate.
According to Motilal Oswal, you will need to open trading and blockchain accounts with registered NSE IFSC buyers for the first time. Currently, 36 vendors are registered in the market. You need to transfer funds from your local bank account to the NSE IFSC registered bank account. Once the wallet is already in your merchant account, you are ready to trade NSE IFSC US shares.
Trading on these receipts will follow U.S. trading times. The timing will be adjusted based on the Day-to-day changes, as applicable, mean exchange. It will start at 8 pm and continue until 2.30 pm the next day. Thus, trading will be conducted. The timing will be adjusted based on the Day-to-day changes, as applicable, mean exchange.
Motilal Oswal said this presents another opportunity to invest in Indian investors through a simplified investment process and at a lower cost. You will have the option to trade at a fractional value compared to lower shares traded in U.S. markets. Investors will be able to hold depository receipts from their debit accounts opened in GIFT City and will be entitled to receive the business benefits associated with the lower stock.
Some of the other stocks that will trade on the NSE IFSC platform soon include Berkshire Hathaway, Mastercard, JP Morgan Chase, Morga Stanley, Nike, PayPal, PepsiCo, Pfizer, and Intel.
Published By- Bharat Anand
Editor- Subbuthai padma
