India's Top 5 Internet stocks
Now people are more reliant on internet connections than ever before, be it for our everyday work, education, shopping, or even to attend weddings.
The number of active Internet users in India is expected to increase by 45% in the next four years and touch m by from around m in , according to the IAMAI-Kantar ICUBE report. The report defines an active user as someone who has accessed the Internet at least once in the past month.
The internet ecosystem will need to evolve to meet the specific needs of this emerging demography.
And the top Indian internet stocks will be at the front, leading charge.
Here's the list of 5 stocks that will help boost India’s internet economy.
1. Info Edge
With a portfolio of brands, Info Edge is India's leading online classifieds firm. It’s one of the oldest internet companies in India.
It owns Naukri.com (online recruiting), 99acres.com (online real estate), jeevansathi.com (online marriage), and shiksha.com (online education service).
It also acts as an investor and has invested in many start-ups in the online space and is aggressively expanding its investment portfolio.
The company also became the first institutional investor to back food delivery start-up Zomato which recently got listed on the stock exchanges.
Info Edge reported robust quarter one numbers. On sequential basis, revenues increased by % mainly led recruitment revenues.
The company is witnessing a healthy improvement in billing led by improvement in IT and ITeS segment (% of revenues), higher renewals, new customer addition, higher demand from job seekers, better branding, and pricing improvement.
That apart, Info edge has performed well in the last one year, giving a return of 91% to its shareholders.
2. Indiamart Intermesh
Indiamart Intermesh is an India-based online marketplace, which connects buyers with suppliers.
The company's online channel focuses on providing a platform to small and medium enterprises (SMEs), large enterprises, as well as individuals.
The business for the company largely comes from SMEs. The platform makes it easier for buyers and suppliers through its offerings which include the marketplace, convenient price discovery, intelligent connect & easy and secure payments.
The business has 71 million products from 56 different industries listed across its website which makes it one of the most diversified marketplace in the country.
Indiamart Intermesh made a stellar debut in Since then, shares of the company have soared % to ₹8, from the issue price of ₹
The rally indicates that investors who bought one lot of Indiamart Intermesh at ₹14, have made a profit of over ₹ lakh.
Indian Railway Catering and Tourism Corporation (IRCTC) is a Mini Ratna (Category-I) central public sector enterprise under Ministry of Railways, Government of India.
It is engaged in catering and hospitality, internet ticketing, travel & tourism, and packaged drinking water (rail neer).
IRCTC enjoys monopoly in the travel support services sector. It's the only entity authorised by the Indian Railways to provide catering services to railways, online railway tickets and packaged drinking water at railway stations and trains in India.
It has a dominant position in online rail bookings and packaged drinking water with around 73% and 45% market share, respectively.
IRCTC posts turnaround results in June quarter on the back of robust operational revenue.
IRCTC while announcing its quarterly earnings in August had also said that its board approved the proposal for a stock split or sub-division of shares.
The company has set 29 October as its record date for sub-division of equity shares of ₹10 each into five equity shares of ₹2 each.
Since its market debut, shares of the travel support services firm has been on a roll. It has almost turned into a multibagger stock from its IPO issue price of ₹ per share.
Speaking of IRCTC, Co-head of research at Equitymaster, Rahul Shah talks whether the company's valuations are running ahead of its fundamentals, in his recent video.
In the video, Rahul discusses whether investors should buy more shares of IRCTC or should they partially exit.
You can watch the video here: IRCTC: Buy, Hold or Sell
4. Just Dial
Justdial is the market leader in local search engine segment in India.
The company provides local search-related services to users across India through multiple platforms, such as Internet, mobile Internet, and over the telephone (voice) and SMS.
In the last one year, the company's shares have surged over %.
The company has also launched JD Omni, an end-to-end business management solution for SMEs. It intends to transition thousands of SMEs to efficiently run their businesses online and have an adequate online presence via their own website and mobile site.
Apart from this, it has also launched JD Pay, for quick digital payments for both users and vendors. It also launched JD Social, a social sharing platform to provide curated content to users.
It also aims to make communication between users and businesses seamless through its real time chat messenger.
Last month, Reliance Retail Ventures took sole control of Just Dial. Reliance retail on 20 July , acquired m equity shares of ₹10 each of Just Dial at a price of ₹1, per equity share from VSS Mani on the floor of the stock exchange through the block window facility.
The acquisition represents % of the post-preferential issue paid-up equity share capital of Just Dial. Reliance Retail will be classified as a promoter of Just Dial.
5. CarTrade Tech
CarTrade Tech is a multi-channel auto platform provider company with coverage and presence across vehicle types and value-added services.
The company operates various brands such as CarWale, CarTrade, Shriram Automall, BikeWale, CarTradeExchange, Adroit Auto, and AutoBiz.
The platform connects new and used automobile customers, vehicle dealers, vehicle OEMs, and other businesses to buy and sell different types of vehicles.
The company generates the majority of its revenue from the transaction charge (57% of the revenue).
Other key revenue streams of the company are media: listing subscriptions and ad revenues from OEMs, dealerships, and other advertisers; software services: marketplace and software solutions for OEMs, dealerships, and banks; auto finance; insurance; and other value-added services.
Its websites and apps handled approximately million user sessions per day and the average monthly visitors (including apps) were m in the financial year ,
The number of vehicles listed for auction stood at , and the number of vehicles sold through auctions stood at , with a conversion rate of % as on the financial year
It has significantly expanded its business, with the total income increasing at a compound annual growth rate (CAGR) of % between financial years and
The company successfully raised ₹30 bn through the initial public offering (IPO) and made its debut on 20 August
Since listing, the company has lost nearly 15% against its issue price of ₹1, per share. Currently, shares of CarTrade Tech are trading at ₹1, on the BSE.
Apart from these 5 stocks, here's a list of other internet stocks to look out for.
Things to keep in mind before investing in Internet stocks
When it comes to technology or internet stocks, it's important to remember that numbers aren't everything.
After all, there are plenty of examples of high-flying companies that didn't have a penny of profits to speak of but went on to deliver massive outperformance – with Zomato being one of the most prominent examples.
That's because internet stocks are unique in their ability to grow quickly and sometimes turn a money-losing operation into a massive cash cow once they reach critical mass.
Well, one should look out for companies that are focused on expanding businesses in India and overseas with excellent technical and business fundamentals, minimal debt, and are available at attractive valuations.
(This article is syndicated from Equitymaster.com)
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An Introduction to the Indian Stock Market
Mark Twain once divided the world into two kinds of people: those who have seen the famous Indian monument, the Taj Mahal, and those who haven't. The same could be said about investors.
There are two kinds of investors: those who know about the investment opportunities in India and those who don't. Although India's exchanges equate to less than % of the total global market capitalization as of Jan. , upon closer inspection, you will find the same things you would expect from any promising market.
Here we'll provide an overview of the Indian stock market and how interested investors can gain exposure.
The BSE and NSE
Most of the trading in the Indian stock market takes place on its two stock exchanges: the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). The BSE has been in existence since The NSE, on the other hand, was founded in and started trading in However, both exchanges follow the same trading mechanism, trading hours, and settlement process.
As of February , the BSE had 5, listed firms, whereas the rival NSE had about 1, as of Dec. 31, Out of all the listed firms on the BSE, only about firms constitute more than 90% of its market capitalization; the rest of the crowd consists of highly illiquid shares.
Almost all the significant firms of India are listed on both the exchanges. The BSE is the older stock market but the NSE is the largest stock market, in terms of volume. As such, the NSE is a more liquid market. In terms of market cap, they're both comparable at about $ trillion. Both exchanges compete for the order flow that leads to reduced costs, market efficiency, and innovation. The presence of arbitrageurs keeps the prices on the two stock exchanges within a very tight range.
An Introduction To The Indian Stock Market
Trading at both the exchanges takes place through an open electronic limit order book in which order matching is done by the trading computer. There are no market makers and the entire process is order-driven, which means that market orders placed by investors are automatically matched with the best limit orders. As a result, buyers and sellers remain anonymous.
The advantage of an order-driven market is that it brings more transparency by displaying all buy and sell orders in the trading system. However, in the absence of market makers, there is no guarantee that orders will be executed.
All orders in the trading system need to be placed through brokers, many of which provide an online trading facility to retail customers. Institutional investors can also take advantage of the direct market access (DMA) option in which they use trading terminals provided by brokers for placing orders directly into the stock market trading system.
Settlement and Trading Hours
Equity spot markets follow a T+2 rolling settlement. This means that any trade taking place on Monday gets settled by Wednesday. All trading on stock exchanges takes place between a.m. and p.m., Indian Standard Time (+ hours GMT), Monday through Friday. Delivery of shares must be made in dematerialized form, and each exchange has its own clearing house, which assumes all settlement risk by serving as a central counterparty.
The two prominent Indian market indexes are Sensex and Nifty. Sensex is the oldest market index for equities; it includes shares of 30 firms listed on the BSE, which represent about 47% of the index's free-float market capitalization. It was created in and provides time series data from April , onward.
Another index is the Standard and Poor's CNX Nifty; it includes 50 shares listed on the NSE, which represent about % of its free-float market capitalization. It was created in and provides time series data from July , onward.
The overall responsibility of development, regulation, and supervision of the stock market rests with the Securities and Exchange Board of India (SEBI), which was formed in as an independent authority. Since then, SEBI has consistently tried to lay down market rules in line with the best market practices. It enjoys vast powers of imposing penalties on market participants, in case of a breach.
Who Can Invest in India?
India started permitting outside investments only in the s. Foreign investments are classified into two categories: foreign direct investment (FDI) and foreign portfolio investment (FPI). All investments in which an investor takes part in the day-to-day management and operations of the company are treated as FDI, whereas investments in shares without any control over management and operations are treated as FPI.
For making portfolio investments in India, one should be registered either as a foreign institutional investor (FII) or as one of the sub-accounts of one of the registered FIIs. Both registrations are granted by the market regulator, SEBI.
Foreign institutional investors mainly consist of mutual funds, pension funds, endowments, sovereign wealth funds, insurance companies, banks, and asset management companies. At present, India does not allow foreign individuals to invest directly in its stock market. However, high-net-worth individuals (those with a net worth of at least $50 million) can be registered as sub-accounts of an FII.
Foreign institutional investors and their sub-accounts can invest directly into any of the stocks listed on any of the stock exchanges. Most portfolio investments consist of investment in securities in the primary and secondary markets, including shares, debentures, and warrants of companies listed or to be listed on a recognized stock exchange in India. FIIs can also invest in unlisted securities outside stock exchanges, subject to the approval of the price by the Reserve Bank of India. Finally, they can invest in units of mutual funds and derivatives traded on any stock exchange.
An FII registered as a debt-only FII can invest % of its investment into debt instruments. Other FIIs must invest a minimum of 70% of their investments in equity. The balance of 30% can be invested in debt. FIIs must use special non-resident rupee bank accounts in order to move money in and out of India. The balances held in such an account can be fully repatriated.
Restrictions and Investment Ceilings
The government of India prescribes the FDI limit, and different ceilings have been prescribed for different sectors. Over a period of time, the government has been progressively increasing the ceilings. FDI ceilings mostly fall in the range of 26% to %.
By default, the maximum limit for portfolio investment in a particular listed firm is decided by the FDI limit prescribed for the sector to which the firm belongs. However, there are two additional restrictions on portfolio investment. First, the aggregate limit of investment by all FIIs, inclusive of their sub-accounts in any particular firm, has been fixed at 24% of the paid-up capital. However, the same can be raised up to the sector cap, with the approval of the company's boards and shareholders.
Secondly, investment by any single FII in any particular firm should not exceed 10% of the paid-up capital of the company. Regulations permit a separate 10% ceiling on investment for each of the sub-accounts of an FII, in any particular firm. However, in the case of foreign corporations or individuals investing as a sub-account, the same ceiling is only 5%. Regulations also impose limits for investment in equity-based derivatives trading on stock exchanges.
Investments for Foreign Entities
Foreign entities and individuals can gain exposure to Indian stocks through institutional investors. Many India-focused mutual funds are becoming popular among retail investors. Investments could also be made through some of the offshore instruments, like participatory notes (PNs), depositary receipts, such as American depositary receipts (ADRs) and global depositary receipts (GDRs), exchange-traded funds (ETFs), and exchange-traded notes (ETNs).
As per Indian regulations, participatory notes representing underlying Indian stocks can be issued offshore by FIIs, only to regulated entities. However, even small investors can invest in American depositary receipts representing the underlying stocks of some of the well-known Indian firms, listed on the New York Stock Exchange and Nasdaq. ADRs are denominated in dollars and subject to the regulations of the U.S. Securities and Exchange Commission (SEC). Likewise, global depositary receipts are listed on European stock exchanges. However, many promising Indian firms are not yet using ADRs or GDRs to access offshore investors.
Retail investors also have the option of investing in ETFs and ETNs, based on Indian stocks. India focused ETFs mostly make investments in indexes made up of Indian stocks. Most of the stocks included in the index are the ones already listed on the NYSE and Nasdaq.
As of , two of the most prominent ETFs based on Indian stocks are iShares MSCI India ETF (INDA) and the Wisdom-Tree India Earnings Fund (EPI). The most prominent ETN is the iPath MSCI India Index Exchange Traded Note (INPTF). Both ETFs and ETNs provide a good investment opportunity for outside investors.
The Bottom Line
Emerging markets like India are fast becoming engines for future growth. Currently, only a very low percentage of the household savings of Indians are invested in the domestic stock market, but with gross domestic product (GDP) growing at 7% to 8% annually for the last few years, though in the 6% range for and , and a stable financial market, we might see more money joining the race. Maybe it's the right time for outside investors to seriously think about joining the India bandwagon.
Most Active by Volume
Most Active by Volume - BSE
|Company Name||Current Price||Change %||Low||High||Value (₹ Cr.)||Volume (in 's)|
|Bank Of Baroda||%||1,|
|Union Bank Of India||%||1,|
|Power Grid Corpn.||%||1,|
|IDFC First Bank||%||1,|
|Bank Of India||%|
|Tata Motors - DVR||%|
|Indian Oil Corp.||%|
|Power Finance Corp||%|
|L&T Finance Holdings||%|
|Jindal Steel & Power||%|
|CentralBank of India||%|
|Adani Ports &Special||%|
|Mah & Mah Finl. Serv||%|
|Aditya Birla Fashion||%|
|Motherson Sumi Sys||%|
|HDFC Life Insurance||%|
|Chola Invest & Fin.||%|
|LIC Housing Finance||%|
|Aditya Birla Capital||%|
|Mahindra & Mahindra||%|
|Sun Pharma Inds.||%|
|Tata Global Beverage||%|
|Sun TV Network||%|
|Amara Raja Batteries||%|
|Berger Paints India||%|
|City Union Bank||%|
|Larsen & Toubro||%|
|Godrej Consumer Prod||%|
|Shriram Trans. Fin||%|
|Motilal Oswal Fin||%|
|AU Small Fin. Bank||%|
|SBI Life Insuran||%|
|Century Textile &Ind||%|
|Kotak Mahindra Bank||%|
|Guj. State Petronet||%|
|Rel. Nippon LifeAsse||%|
|Apollo Hospital Ent.||%|
|Dr. Reddys Lab||%|
|L&T Technology Serv.||%|
|Colgate Palmol. (I)||%|
|PNB Housing Finance||%|
|The Ramco Cements||%|
|Kansai Nerolac Paint||%|
|ICICI Lombard General Ins||%|
|Oracle Finl. Service||%|
|Whirlpool Of India||%|
|Bajaj Hold & Invest||%|
|Shriram City Union||%|
Stocks - More Stats Links
How To Invest In Indian Stocks From The US
Let us first get to know the Indian stock market in brief before we dive into how you can invest in it.
The two top stock exchanges in India are the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). BSE is the oldest stock exchange established in while NSE established in is the biggest stock in India in terms of volume. NSE provides higher liquidity than BSE despite having a lower number of listings than the BSE. The market capitalization of NSE is at about $ trillion and BSE is $ trillion. BSE's index Sensex has 30 companies while NSE's index Nifty has 50 companies.
All the stock exchanges in India are regulated by the Securities and Exchange Board of India (SEBI).
Investing in Indian Stocks From the US
The most common choice among investors includes investing in India-focused mutual funds in the US, Exchange-Traded Funds (ETFs), and Exchange-Traded Notes (ETNs) based on Indian stock or American or Global Depositary Receipts (ADRs or GDRs).
To have access to the Indian stock market from the US, you will have to either open an account with an international brokerage firm regulated by the U.S. Securities and Exchange Commission (SEC) or open an account with a SEBI-registered Indian stockbroker.
You can open an account with any known Indian brokerage firm such as Zerodha, Sharekhan, Motilal Oswal after providing the prerequisites to start trading in the Indian stock market.
International brokers such as Interactive brokers having a presence in the NSE allows you to trade in Indian shares, options, futures, indices. You can open a brokerage account to start buying and selling stock directly from the Indian stock exchange.
Non-Resident Indians, as well as resident Indians, have the opportunity to open specific accounts with such brokers. Through these accounts, Indian investors can also access NSE stocks based on their location.
Fidelity Investments or Charles Schwab are other brokerage firms that also offer trading services. You will need to pay additional commissions fees and currency conversion costs. Since stocks are traded in the Indian currency, keep in mind the foreign exchange rates. Compare the top money transfer companies before sending your money to India to get the best exchange rate and save on transfer fees.
Investing in ADRs or GDRs
You may already have access to Indian stock through American depositary receipts (ADRs) or Global depositary receipts (GDRs) through your brokerage firm. ADRs are listed on the New York Stock Exchange (NYSE) and the NASDAQ exchange. While GDRs are listed on the London Stock Exchange (LSE).
Some of the publicly traded companies in India have their shares listed on the US and UK stock exchanges via their depositary receipts. ADRs are negotiable certificates issued by a US bank that represent a specified number of shares of a foreign company that are traded in the U.S. stock exchange.
India focused ETFs
These indexes are made up of Indian stocks and are already found listed on the NYSE and Nasdaq. Some popular India focused ETFs are:
- iShares MSCI India ETF (INDA)
- WisdomTree India Earnings ETF (IXSE)
- Franklin FTSE India ETF (FLIN), etc.
And a popular ETN includes iPath MSCI India ETN (INPTF). These are good investment options for foreign investors.
You can buy these ETFs from independent brokerages like Interactive Brokers, TD Ameritrade for a very low commission fee.
Online Trading Platforms:
One can trade in stocks in 3 different ways: desktop, web, and mobile app. The desktop-based platform is the fastest trading platform among the three trading platforms. One needs to install the software on the desktop/ laptop after downloading it from the broker's website. Whereas for the web-based platform, one can access the login page via web browsers like Firefox or Chrome. Nowadays, there is an app for almost everything. Most major stockbrokers now have Android and iOS apps for trading services.
Currently, trading access to the Indian financial markets is only available to NRIs and FIIs (Financial Institution Intermediaries).
Given below are some of the popular online trading platforms:
Interactive Brokers (IB) is an international online broker based in the U.S. It is considered the top pick among professional stock traders mainly because of its institutional-grade desktop trading platform and low margin rates.
IB's web-based platform, its premiere Trader Workstation (TWS), is one of the best trading platforms in the industry. IB also offers mobile trading apps for both Android and iOS mobile devices.
Its $0 trades and user-friendly web platform may also attract casual investors. One major plus-point with IB is that investors have access to a vast range of global markets and products and research tools. It is regulated globally by several top-tier financial authorities such as the U.S. SEC and the UK's Financial Authority (FCA).
NRIs have trading access on the NSE through the IB-India subsidiary. For the time being, only Futures and Futures Options trading are available through the F&O segment. Stock trading is not yet available. Also, FII is currently not supported.
NSE trades cost a low flat rate of Rs 20 per order for stocks, futures, and options. There is no minimum deposit required by IB. Pricing for NRI includes $ (equivalent in INR) minimum for a subscription to market data and research for NSE listed stocks and derivatives and minimum brokerage fees of Rs per month for NSE trading accounts and $10 for overseas trading accounts.
Zerodha is India's largest online discount broker by active clients base, market volume, and new customer acquisition. It is regulated by SEBI. Known for its lowest brokerage rates for futures and options, commodity trading, equity, mutual funds, and bonds, it also offers highly advanced trading tools.
Direct mutual funds investments and equity (NSE, BSE) come with 0 charges. And flat Rs 20 or % on intraday trades across equity, currency, and commodity trades.
Zerodha offers a range of in-house platforms for online trading and as a dashboard such as Kite (web-based), Kite Mobile (mobile trading app), Coin, Console, etc., and various partner products such as Smallcase, Streak, and more. It is suitable for all kinds of traders-active and passive traders, beginner traders, and algo traders.
NRIs can invest in the equity segment and mutual funds but are not allowed to trade the currency or commodity markets in India. Brokerage charges are Rs per order for futures and options and Rs or % per executed order for equity.
With over 2 million customers, Sharekhan is one of the top full-service brokers in India. Full-service brokers provide investment advice, stock recommendations, research reports, trading tips, training for trading, and a relationship manager in addition to buying and selling of shares.
Investors can choose from a wide range of products and services such as equities, mutual funds, currency, derivatives, Portfolio Management Services (PMS), IPOs, stock quotes, news alerts on the stock market, and so on. It also offers free online seminars/workshops for investors. It also offers NRIs services.
Sharekhan trading platforms include Trade Tiger, Sharekhan.com, SharekhanMobile, ComMobile Pro, InstaMf App. Trade Tiger comes in two versions: Trade Tiger Basic for casual traders and Trade Tiger Advanced for professional traders.
Full-service brokers typically charge a percentage ( to %) of the transaction value as brokerage, so the total brokerage is high if your investment amount is huge.
Robinhood is an online discount brokerage that lets investors trade stocks, options, ETFs, and cryptocurrency with no commission and fees. Currently, it is one of few brokers that offers cryptocurrency trading.
It appeals to active traders looking for free-commission trading and beginner traders. Investors can trade on the web-based portal or use their mobile trading app.
If you are interested in buying Indian stocks from the U.S., you can buy shares of Indian companies listed on the U.S. stock exchange. Robinhood offers options trading and access to over global stocks through American Depositary Receipts (ADRs).
Taxation on Investing in Indian Stocks
Income from the sale of equity shares comes under 'Capital Gains': when the shares are sold at a higher price than the purchase price.
Tax on Short term capital gains: If you sell equity shares listed on a stock exchange within 1 year of purchase, the gains are taxable at 15%.
Tax on Long term capital gains: Tax is exempted on gains made on stocks held for over 1 year. However, if the long-term capital gain is more than Rs 1 lakh, a tax of 10% is levied. The benefit of indexation is also not available to the seller.
Tax on income from F&O: Treated as a business income, it will be taxed according to the tax slab rates in India.
Securities Transaction Tax (STT)
STT is a direct tax levied on the purchase and sale of securities listed on the recognized stock exchanges (not on commodities or currency trades). Different STT rates are applicable for Equity, and Futures and Options trades.
For commodities, the Commodities Transaction Tax (CTT) is levied.
In addition to STT, there will be additional charges Exchange charges, Statutory Tax, and service tax.
Read more on taxation and managing capital gains in India.
Can foreigners invest in Indian stocks?
As for now, foreign individuals can not directly invest in the Indian stock market. Although individuals with a high net worth (at least $50 million) can register with SEBI as a Foreign Institutional Investor (FIIs).
Portfolio Investment Scheme (PIS)
The Reserve Bank of India developed a scheme called the Portfolio Investment Scheme (PIS) that grants permission to Non-Resident Indians (NRIs), Persons of Indian Origin (PIOs), and Foreign Institutional Investors (FIIs) to trade in the primary and secondary capital markets in India.
Under PIS, FIIs and NRIs can buy shares or debentures of companies listed on the stock exchange in India on a repatriation basis. PIS account allows investors to trade in the equity segment only.
Under the PIS, eligible entities can open either a Non-Resident External-NRE or Non-Resident Ordinary-NRO bank account to be able to trade.
NRE/NRO is a rupee account. The main difference between these accounts is that NRE is repatriable and NRO is non-repatriable. This means you can send your money in the NRE account back to your country of residence while the money in the NRO cannot be repatriated beyond $1 million per year.
You are then required to open a Demat account (for storing your securities electronically) and trading account. Before you open a Demat and trading account, get a PIS-permission letter from the RBI. Only then you will be able to open the Demat and trading account with a SEBI regulated brokerage firm of your choice by linking your NRE or NRO bank account.
You have to submit a Permanent Account Number (PAN) card (for tax purposes) along with the necessary documents for identity verification.
Do keep in mind only one account (either NRE or NRO account) is to be associated with one trading account and Demat account.
Additionally, the government of India has put a certain ceiling on investments. For example, overall investment for FIIs should not exceed 24 percent of the paid-up capital of the Indian company (this 24 percent can be raised to sectoral cap after gaining approval of the company's board and shareholders) and 10 percent for NRIs/PIOs (can be raised to 24 percent after approval from the board)
Non-Portfolio Investment Scheme (Non-PIS)
A Non-PIS account is an ordinary NRI saving account opened with any bank in India. The transaction with a non-PIS account is not reported to RBI. With regards to investments, the NRO Non-PIS account can be used to invest in equity, shares, IPOs, mutual funds, and bonds on a non-repatriation basis.
How to Manage Your Investments From Abroad as an NRI?
- Appoint a mandate holder to manage your NRE/NRO accounts. You have to provide "Appointment of Mandate Holder" application to your bank with the mandatory documents and the specimen signature of your mandate holder
- Appoint a power of attorney (POA) in India to track and manage your investments
- Most brokers have online trading facilities. Once you meet the required compliance and Know Your Customers (KYC) guidelines, you can start trading on online platforms.
As an NRI, you are required to do a Foreign Account Tax Compliance Act (FATCA) declaration before you open your trading and Demat account.
Do keep in mind that NRIs are not allowed to trade in certain Indian stocks. Thoroughly check with your brokers for such information to avoid penalties.
India is one of the top emerging markets in the world with foreign investment steadily rising over the years. If you are looking to diversify your investment portfolio through investment in foreign stocks, investing in the Indian stock market could be a smart move.
Stocks indian company
National Stock Exchange of India
Stock exchange in Mumbai
National Stock Exchange of India Limited (NSE) is the leading stock exchange of India, located in the city of Mumbai (previously Bombay), Maharashtra. It is under the ownership of some leading financial institutions, Banks, and Insurance companies. NSE was established in as the first dematerialized electronic exchange in the country. NSE was the first exchange in the country to provide a modern, fully automated screen-based electronic trading system that offered easy trading facilities to investors spread across the length and breadth of the country. Vikram Limaye is Managing Director & Chief Executive Officer of NSE.
National Stock Exchange has a total market capitalization of more than US$3 trillion, making it the world's 10th-largest stock exchange as of May  NSE's flagship index, the NIFTY 50, a 50 stock index is used extensively by investors in India and around the world as a barometer of the Indian capital market. The NIFTY 50 index was launched in by NSE. However, Vaidyanathan () estimates that only about 4% of the Indian economy / GDP is actually derived from the stock exchanges in India.
Unlike countries like the United States where nearly 70% of the country's GDP is derived from large companies in the corporate sector, the corporate sector in India accounts for only % of the national GDP (as of October ). Of these only 7, companies are listed of which only trade on the stock exchanges at BSE and NSE. Hence the stocks trading at the BSE and NSE account for only around 4% of the Indian economy, which derives most of its income-related activity from the so-called unorganized sector and household spending.
Economic Times estimates that as of April , 6 crore (60 million) retail investors had invested their savings in stocks in India, either through direct purchases of equities or through mutual funds. Earlier, the Bimal Jalan Committee report estimated that barely % of India's population invested in the stock market, as compared to 27% in the United States and 10% in China.
National Stock Exchange was incorporated in the year to bring about transparency in the Indian equity markets. Instead of trading memberships being confined to a group of brokers, NSE ensured that anyone who was qualified, experienced, and met the minimum financial requirements was allowed to trade. In this context, NSE was ahead of its time when it separated ownership and management of the exchange under SEBI's supervision. Stock price information that could earlier be accessed only by a handful of people could now be seen by a client in a remote location with the same ease. The paper-based settlement was replaced by electronic depository-based accounts and settlement of trades was always done on time. One of the most critical changes involved a robust risk management system that was set in place, to ensure that settlement guarantees would protect investors against broker defaults.
NSE was set up by a group of leading Indian financial institutions at the behest of the Government of India to bring transparency to the Indian capital market. Based on the recommendations laid out by the Pherwani committee, NSE was established with a diversified shareholding comprising domestic and global investors. The key domestic investors include Life Insurance Corporation, State Bank of India, IFCI Limited, IDFC Limited and Stock Holding Corporation of India Limited. Key global investors include Gagil FDI Limited, GS Strategic Investments Limited, SAIF II SE Investments Mauritius Limited, Aranda Investments (Mauritius) Pte Limited, and PI Opportunities Fund I.
The exchange was incorporated in as a tax-paying company and was recognized as a stock exchange in under the Securities Contracts (Regulation) Act, , when P. V. Narasimha Rao was the Prime Minister of India and Manmohan Singh was the Finance Minister. NSE commenced operations in the Wholesale Debt Market (WDM) segment in June The capital market (equities) segment of the NSE commenced operations in November , while operations in the derivatives segment commenced in June NSE offers trading, clearing and settlement services in equity, equity derivative, debt, commodity derivatives, and currency derivatives segments. It was the first exchange in India to introduce an electronic trading facility thus connecting the investor base of the entire country. NSE has VSATs and leased lines spread over more than cities across India.
NSE was also instrumental in creating the National Securities Depository Limited (NSDL) which allows investors to securely hold and transfer their shares and bonds electronically. It also allows investors to hold and trade in as few as one share or bond. This not only made holding financial instruments convenient but more importantly, eliminated the need for paper certificates and greatly reduced incidents involving forged or fake certificates and fraudulent transactions that had plagued the Indian stock market. The NSDL's security, combined with the transparency, lower transaction prices, and efficiency that NSE offered, greatly increased the attractiveness of the Indian stock market to domestic and international investors.
This article is about National Stock Exchange of India. For NSE EMERGE, see NSE EMERGE.
NSE EMERGE is NSE's new initiative for Small and medium-sized enterprises (SME) & Startup companies in India. These companies can get listed on NSE without an Initial public offering (IPO). This platform will help SME's & Startups connect with investors and help them with the raising of funds. In August , the th company listed on NSE's SME platform.
NSE offers trading and investment in the following segments
The National Stock Exchange of India Limited (NSE) commenced trading in derivatives with the launch of index futures on 12 June The futures and options segment of NSE has made a global mark. In the Futures and Options segment, trading in the NIFTY 50 Index, NIFTY IT index, NIFTY Bank Index, NIFTY Next 50 index, and single stock futures are available. Trading in Mini Nifty Futures & Options and Long term Options on NIFTY 50 are also available. The average daily turnover in the F&O Segment of the Exchange during the financial year April to March stood at ₹ trillion (US$20billion).
On 29 August , National Stock Exchange launched derivative contracts on the world's most-followed equity indices, the S&P and the Dow Jones Industrial Average. NSE is the first Indian exchange to launch global indices. This is also the first time in the world that futures contracts on the S&P index were introduced and listed on an exchange outside of their home country, the USA. The new contracts include futures on both the DJIA and the S&P and options on the S&P
On 3 May , the National Stock exchange launched derivative contracts (futures and options) on FTSE , the widely tracked index of the UK equity stock market. This was the first of its kind index of the UK equity stock market launched in India. FTSE includes the of largest UK-listed blue-chip companies and has given returns of percent on investment over three years. The index constitutes per cent of UK's equity market cap.
On 10 January , the National Stock Exchange signed a letter of intent with the Japan Exchange Group, Inc. (JPX) on preparing for the launch of NIFTY 50 Index futures, a representative stock price index of India, on the Osaka Securities Exchange Co., Ltd. (OSE), a subsidiary of JPX.
Moving forward, both parties will make preparations for the listing of yen-denominated NIFTY 50 Index futures by March , the integration date of the derivatives markets of OSE and Tokyo Stock Exchange, Inc. (TSE), a subsidiary of JPX. This is the first time that retail and institutional investors in Japan will be able to take a view on the Indian markets, in addition to current ETFs, in their own currency and in their own time zone. Investors will therefore not face any currency risk, because they will not have to invest in dollar-denominated or rupee-denominated contracts.
In August , currency derivatives were introduced in India with the launch of Currency Futures in USD–INR by NSE. It also added currency futures in Euros, Pounds, and Yen. The average daily turnover in the F&O Segment of the Exchange on 20 June stood at ₹ billion (US$billion) in futures and ₹ billion (US$billion) in options, respectively.
Interest Rate Futures
In December , exchanges in India received approval from market regulator SEBI for launching interest rate futures (IRFs) on a single GOI bond or a basket of bonds that will be cash-settled. Market participants have been in favor of the product being cash-settled and being available on a single bond. NSE will launch the NSE Bond Futures on 21 January on highly liquid percent and percent year GOI bonds. Interest Rate Futures were introduced in India by NSE on 31 August , exactly one year after the launch of Currency Futures. NSE became the first stock exchange to get approval for interest-rate futures, as recommended by the SEBI-RBI committee.
On 13 May , NSE launched India's first dedicated debt platform to provide a liquid and transparent trading platform for debt-related products.
The Debt segment provides an opportunity for retail investors to invest in corporate bonds on a liquid and transparent exchange platform. It also helps institutions that are holders of corporate bonds. It is an ideal platform to buy and sell at optimum prices and help Corporates to get adequate demand when they are issuing the bonds.
Trading on the equities segment takes place on all days of the week (except Saturdays and Sundays and holidays declared by the Exchange in advance). The market timings of the equities segment are:
- (1) Pre-open session:
- Order entry & modification Open: hrs
- Order entry & modification Close: hrs*
*with random closure in last one minute. Pre-open order matching starts immediately after the close of pre-open order entry.
- (2) Regular trading session
- Normal/Retail Debt/Limited Physical Market Open: hrs
- Normal/Retail Debt/Limited Physical Market Close: hrs.
- Aftermarket hours: - hrs
Exchange Traded Funds and Derivatives on National Stock Exchange
The following products are trading on the NIFTY 50 Index in the Indian and international Market:
- 7 Asset Management Companies have launched exchange-traded funds on NIFTY 50 Index which is listed on NSE
- 15 index funds have been launched on NIFTY 50 Index
- Unit-linked products have been launched on the NIFTY 50 Index by several insurance companies in India
- World Indices
Derivatives Trading on NIFTY 50 Index:
- Futures and Options trading on NIFTY 50 Index
- Trading in NIFTY 50 Index Futures on Singapore Stock Exchange(SGX)
- Trading in NIFTY 50 Index Futures on Chicago Mercantile Exchange(CME)
NSE's trading systems are a state-of-the-art application. It has an uptime record of % and processes more than a billion messages every day with a sub-millisecond response time.
NSE has taken huge strides in technology in 20 years. In , when trading started, NSE technology was handling 2 orders a second. This increased to 60 orders a second in Today NSE can handle 1,60, orders/messages per second, with infinite ability to scale up at short notice on demand, NSE has continuously worked towards ensuring that the settlement cycle comes down. Settlements have always been handled smoothly. The settlement cycle has been reduced from T+3 to T+2/T+1.
NSE has collaborated with several universities like Gokhale Institute of Politics & Economics (GIPE), Pune, Bharati Vidyapeeth Deemed University (BVDU), Pune, Guru Gobind Singh Indraprastha University, Delhi, the Ravenshaw University of Cuttack and Punjabi University, Patiala, among others to offer MBA and BBA courses. NSE has also provided mock market simulation software called NSE Learn to Trade (NLT) to develop investment, trading, and portfolio management skills among the students. The simulation software is very similar to the software currently being used by the market professionals and helps students to learn how to trade in the markets.
NSE also conducts online examinations and awards certification, under its Certification in Financial Markets (NCFM) programs. At present, certifications are available in 46 modules, covering different sectors of financial and capital markets, both at the beginner and advanced levels. The list of various modules can be found at the official site of NSE India. In addition, since August , it has offered a short-term course called NSE Certified Capital Market Professional (NCCMP). The NCCMP or NSE Certified Capital Market Professional is a hour program for over 3–4 months, conducted at the colleges, and covers theoretical and practical training in subjects related to the capital markets. NCCMP covers subjects like equity markets, debt markets, derivatives, macroeconomics, technical analysis, and fundamental analysis. Successful candidates are awarded joint certification from NSE and the concerned.
NSE co-location case
On 8 July , Sucheta Dalal wrote an article on Moneylife alleging that some NSE employees were leaking sensitive data related to high-frequency trading or co-location servers to a select set of market participants so that they could trade faster than their competitors. NSE alleged defamation in the article by Moneylife. On 22 July , NSE filed a ₹1 billion (US$13million) suit against the publication. However, on 9 September , the Bombay High Court dismissed the case and fined NSE ₹5 million (US$66,) in this defamation case against Moneylife. The High Court asked NSE to pay ₹, (US$2,) to each journalist Debashis Basu and Sucheta Dalal and the remaining ₹ million (US$62,) to two hospitals.
The Bombay High Court has stayed the order on costs for a period of two weeks, pending the hearing of the appeal filed by NSE.
In May SEBI has debarred NSE from accessing the markets for a period of 6 months. While NSE confirmed this will not impact their functioning, they won't be able to list their IPO or introduce any new trading products for that period. Additionally, the watchdog also ordered NSE to disgorge Rs crores (along with accrued interest for the period), an amount equivalent to the profits it made from the unfair trade practice of co-location servers they provided during the period from –11 to –
The board also passed orders against 16 individuals including former managing directors and CEOs Ravi Narain and Chitra Ramakrishna ordering them to disgorge 25% of their salaries during that period along with interest. All money is to be paid into the Investor protection and education fund. These individuals have also been debarred from the markets or holding any position in a listed company for a period of five years.
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Coordinates: 19°3′37″N72°51′35″E / °N °E / ; (National Stock Exchange)
Financial services in India
Indian stocks rise as higher commodity prices drive metals, energy stocks
BENGALURU, Oct 18 (Reuters) - Indian shares hit record highs on Monday as metals and energy stocks jumped on a rally in commodity prices, while PNB Housing fell 5% after the company called off a deal with Carlyle Group.
The NSE Nifty 50 index (.NSEI) was up % at 18,, while the S&P BSE Sensex (.BSESN) rose % to 61, by GMT. Indian markets were closed on Friday for a holiday.
The Nifty metals index (.NIFTYMET) rose 3%, led by a 15% surge in Hindustan Zinc (HZNC.NS) as global zinc prices surged due to production cuts.
The Nifty energy index (.NIFTYENR) rose % as crude prices hit their highest in years.
The Nifty Bank index (.NSEBANK) gained % after India's largest private-sector lender HDFC Bank (HDBK.NS) rose 1% after it reported a % jump in Sept-quarter profit on Saturday.
PNB Housing Finance Ltd (PNBHF) (PNBH.NS) fell 5% after the company said last week it was scrapping a fund raising deal with a set of investors led by private equity firm Carlyle Group Inc.
Reporting by Nallur Sethuraman in Bengaluru; editing by Uttaresh.V
Our Standards: The Thomson Reuters Trust Principles.
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