Indian investors rush to Nvidia, SpaceX, Apple as local trading apps roll out access to U.S. stocks
Major Indian brokerages are providing retail investors access to U.S. stocks at a time when the local market has been battered.
Key points
- Indian investment platforms Groww and Zerodha are opening access to U.S. stocks for retail investors, with Groww already live and Zerodha planning a launch in a few weeks.
- NVIDIA, SpaceX, Apple, Alphabet, Amazon, Micron and Meta are the most popular U.S. companies among early users, according to Groww's Harsh Jain.
- India's Nifty 50 has fallen nearly 13% this year while the S&P 500 has gained over 12%, and foreign investors have pulled a record $32.5 billion from Indian equities since January.
Major Indian online investment platforms are giving millions of retail investors access to U.S. stocks, as Indians seek global assets while their home market underperforms. Previously, U.S. markets and exchange-traded funds were reachable mainly through global banks and wealth management firms serving wealthier Indians.
Groww, which accounts for more than 29% of India's 46 million active investors across stock brokerages, launched U.S. equity trading earlier this month, chief operating officer and co-founder Harsh Jain told CNBC. Zerodha, the second-largest platform with a 15% share of active clients per NSE data, is beta testing U.S. stock access and plans to launch in a few weeks. Angel One, with 6.7 million active retail clients, is also reportedly planning a U.S. stock trading launch.
Most popular U.S. names
NVIDIA, SpaceX, Apple, Alphabet, Amazon, Micron and Meta are the most popular companies among early users, Jain said. Groww offers access to more than 10,000 U.S. stocks, exchange-traded funds and fractional share ownership.
Kotak Mahindra Asset Management Singapore's Nitin Jain told CNBC there is a "big interest" among Indians in U.S. stocks, especially tech companies. Zerodha's Somnath Mukherjee said latent demand has always existed in India for global companies.
There has always been latent demand in India for investing in global companies
— Somnath Mukherjee, vice president of corporate development at Zerodha
Why investors are looking abroad
Mukherjee cited the Indian stock market's underperformance over the past few years, the lack of local artificial intelligence champions and the rupee's depreciation against the dollar as drivers of demand. The Nifty 50 has dropped nearly 13% since the start of the year while the S&P 500 has gained over 12%, and foreign investors have withdrawn a record $32.5 billion in direct equities since January, per NSDL data.
In August, resident Indians sent over $321 million overseas for equity and debt investments, up 111% from a year ago, according to central bank data. Tanvi Kanchan of Anand Rathi Shares & Stock Brokers said the concern is that outflows rise when the rupee is weak and U.S. markets look strong, which could "amplify pressure at the worst moment." Kotak's Jain cautioned the Indian regulator could have "second thoughts" about retail access to U.S. markets as participation grows.
