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NRI IPO Investment in India

Published on Sunday, July 10, 2016 by Chittorgarh.com Team | Modified on Thursday, December 6, 2018

NRI IPO Investment in India

An NRI is an individual resident outside India who is a citizen of India or is an 'Overseas Citizen of India' cardholder within the meaning of Section 7(A) of the Citizenship Act, 1955.

Can NRI apply for IPO Shares?

Yes, Eligible NRI's can invest in Initial Public Offers in India.

Note: Banks like ICICI Bank doesn't offer Online IPO and Mutual Funds Investment for NRI customers other than the Middle East customers. If the NRI customer is in India, he can apply in IPO or buy Mutual funds with the help from the bank branches. As per ICICI Bank, this limitation is because of regulatory requirement where products which are sold through a fund manager cannot be offered to the NRI customers residing in the US, UK or Canada.

For NRI's, it is recommended to read the Draft Red Herring Prospectus of the IPO they planning to invest for more detail.

Most IPO Red Herring Prospectus in India has a section like below.

Eligible NRI(s): NRI(s) from jurisdictions outside India where it is not unlawful to make an offer or invitation under the Offer and in relation to whom the Bid cum Application Form and this Red Herring Prospectus will constitute an invitation to purchase the Equity Shares.

Eligible NRI's can invest in IPO's under two categories:

  1. Retail Individual Bidders

    NRIs can maximum bid in such a number of Equity Shares so that the Bid Amount does not exceed Rs 200,000 (less Retail Discount if any).

  2. Non-Institutional Bidders

    NRIs can maximum bid for Equity Shares not exceeding the Offer size, subject to applicable limits.

Note:

  • For NRIs, a Bid Amount of up to Rs 200,000 may be considered under the Retail Category for the purposes of allocation and a Bid Amount exceeding Rs 200,000 may be considered under the Non-Institutional Category for the purposes of allocation.

  • Eligible NRI Bidders bidding on a repatriation basis by using the Non-Resident IPO Application Forms should authorize their SCSB to block their Non-Resident External ('NRE') accounts or Foreign Currency Non-Resident ('FCNR') Accounts.

  • Eligible NRI Bidders bidding on a non-repatriation basis by using Resident IPO Application Forms should authorize their SCSB to block their Non-Resident Ordinary (NRO) accounts for the full Bid Amount, at the time of the submission of the Bid cum Application Form.

NRI IPO FAQs:

  1. Does NRIs need the permission of RBI to subscribe for IPOs?

    No, NRIs do not require any permission to invest through IPO.

  2. Do NRIs need approvals from RBI for selling securities acquired through IPOs?

    No. NRIs can sell IPO shares without any approval.

    Note that, while seeking the credit of sale proceeds to NRE/NRO account, the bank should be provided with the details regarding date of allotment and cost of acquisition to calculate the taxes, if any.

  3. Can NRI apply IPO's online?

    Yes, NRI's can apply IPO online if the broker whom which they have account offer Online IPO facility.

  4. Can I apply in IPO Online through my ICICI Bank NRI 3-in-1 account?

    If you are resident of US, UK or Canada, you cannot apply in IPO's online. If you are visiting India for vacation, you could apply in IPO by visiting the bank branch.

For more information, visit:

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User Comment

avatar
2. Shri  Dec 4, 2018 15:38 Reply
Thanks for the article. But this NRI refers to only people from Gulf countries. ICICI Bank told me these are not applicable for UK NRIs.
I cannot distinguish between Gulf NRI and UK, EU/US NRI.
Is there any clarification?
Is there any other bank which allows NRI to buy IPO Equity shares?

Thanks, Shri
avatar
1. deliteink  Jul 26, 2016 15:18 Reply
great article. really informative.


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