Can NRIs invest in Indian IPOs?
NRI Investment in Indian IPOs: Bank Accounts you need
Non-Resident Indians can invest in initial public offering (IPO) of equity shares, bonds and NCDs in India. NRI IPO investment in India can be done through Non-PIS account only (NRO or NRE savings account without PIS permission).
However, Indian companies going public can decide whether or not to allow NRIs to invest in an IPO. Usually, companies don’t allow NRIs to invest in IPO because there are additional compliance requirements by the RBI in case of NRI investors. The issuer company needs to inform the Reserve Bank of India about the shares bought by NRI investors.
How can NRI apply for IPO in India?
No special approval is required from the RBI for NRIs to buy or sell IPO shares in India. NRIs can complete the IPO investment-related bank transactions through Non-PIS savings bank account.
You can invest in an IPO in India online using a 3-in-1 NRI Account for Non-Resident Indians with a bank in India. If you have an NRI Demat account with a stockbroker, like Zerodha, you can apply for IPO investment through the net banking service of the bank you have your non-PIS saving bank account with.
- NRIs can refer to the Red Herring Prospectus of the company going public to check their eligibility to invest in its IPO.
- Banks like ICICI Bank don’t offer online IPO to NRI customers.
There are two categories for eligible NRIs to invest in IPOs in india:
- Retail Individual Bidders
NRI investors can bid for equity shares for an amount not exceeding Rs. 200,000 (less retail discount if any).
- Non-Institutional Bidders
NRI investors can bid for equity shares less than the offer size, subject to applicable limits.
- NRIs can invest in IPO in India only in Indian Rupee or freely convertible foreign exchange.
- NRI investors bidding on a repatriation basis should bid through blue color NR IPO Application Forms and authorize their Self-Certified Syndicate Bank to block their NRE or FCNR accounts.
- NRI investors bidding on a non-repatriation basis should bid through white color resident IPO Application Forms and authorize their Self-Certified Syndicate Bank to block their NRO accounts for the full bid amount.
To ask any question related to NRI investment in India, you can download SBNRI App from the Google Play Store or App Store. You can also use the SBNRI app for investment in stock market/ mutual funds, Pre-IPO, Asset Finance, Commercial Real Estate, Indian Startups Funds, NRI account opening, etc. To ask any questions, click on the button below. Also, visit our blog and YouTube channel for more details.
Do NRI investors need to seek permission from RBI to apply for IPO?
No. NRIs don’t need permission from the RBI. NRIs can invest in IPO through Non-PIS account.
Can NRI investors apply for IPO online?
Yes, NRIs can apply for IPO online provided the broker or bank where they have an account offers an Online IPO facility. However, Due to extended compliance requirements and costs, many banks don’t offer online IPO for NRI investors. They need to check the IPO Red Herring Document of the issuer company to confirm their eligibility for IPO investment.
Can US NRI invest in Mutual Funds in India?
Yes. NRIs from the USA can also invest in Mutual Funds in India.
Can NRI invest in Indian Stock Market?
Yes. NRIs can invest in the Indian Stock Market as per the RBI guidelines.
Who is an NRI?
An NRI or Non Resident Indian is an Indian Citizen living outside India for a minimum of 183 days in 1 financial year for the purpose of employment, business or vocation (occupation for which an individual is trained).
Indian Citizens who have gone out or are staying abroad for some other purpose with an intention to stay outside India for an uncertain period (job or assignments where you don’t know when you will return to India) can also be termed as NRIs.