Newly listed US stocks catch the fancy of Indians


Mumbai: New listings on Wall Street are appealing to Indian investors. Robinhood, the largest retail brokerage in the US, made its debut on Wall Street late last month and quickly became the talking point of various Reddit groups in India. It had a tepid start but last week the stock made a comeback, rallying 60%.

This surge along with the cult status of the brokerage has prompted Indian investors to invest as much as $10-15 million in the stock, according to industry estimates.

According to Stockal, a brokerage that offers foreign company shares to Indians, Robinhood has been among the top 10 purchased stocks on its platform since the listing.

The US brokerage isn’t the only object of Indian investor affection. Brokerages said the recently listed Coinbase and Doordash also saw traction among local investors with purchases of up to $30-40 million.

“Since the IPO, Robinhood has been one of the top 10 stocks on Stockal and nearly 6% of total trades on our platform have been in Robinhood,” said Stockal cofounder Sitashwa Srivastava.

“These days, wherever a popular Wall Street IPO happens, like Coinbase or Robinhood, we receive 20-30% more queries from the customers,” added Srivastava.


‘Trend may Continue’

However, most Indians betting on these stocks do not subscribe to initial public offerings (IPOs). Investing in a US IPO would require a dollar bank account and hence they would need to comply with Liberalised Remittance Scheme (LRS) norms of the Reserve Bank of India (RBI). Instead, they pick up the stock once it has listed, since such trades can be made in rupees through various Indian brokerages.

Robinhood is a California-based brokerage that’s considered a pioneer in offering commission-free, flat-fee services. The company says its aim is to democratise the market. The risk appetite of Robinhood clients is vastly different from those of any other brokerage. Most of them connect over social media platforms such as Reddit and make synchronised trades in risky assets, notably Gamestop and Dogecoins, to name a few.

“Since the stock got listed, Robinhood has been the top 10 most bought stock on our platform,” said Viram Shah, chief executive officer, Vested Finance. “Investors acknowledge the fact that Robinhood has disrupted the online brokerage space in the US.”

The trend extends beyond Robinhood, said experts. The world’s largest cryptocurrency exchange Coinbase made its Nasdaq debut in April and several Indian investors have put money into the stock after its listing. Similarly, the counter of US-based food delivery application Doordash also saw strong demand in December 2020 after its IPO.

“Over the past six months, we have seen that IPOs in general have been quite popular among clients on our platform. Nearly 10% of all trades placed have been in companies that went public over the past year and exchange traded funds (ETFs) tracking recently listed companies,” said Viraj Nanda, chief executive officer, Globalise, a brokerage that offers foreign shares to Indian clients. “We expect this trend to continue, as Indian investors continue to look for the opportunity to invest in innovative, high-growth companies listing in the US.”


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