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Key Highlights
- According to Stockal, Robinhood has been among the top 10 purchased stocks on its platform since the listing.
- Not only Robinhood but Brokerages said newly-listed Coinbase and Doordash also saw traction among local investors with purchases of up to $30-40 million.
- Coinbase made its Nasdaq debut in April and several Indian investors have put money into the stock after its listing.
New Delhi: More and more Indian investors are getting attracted by new listings on Wall Street such as Robinhood, Coinbase & Doordash. 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%.
The Economic Times citing industry estimates mentioned in a report that Indian investors have invested as much as $10-15 million in the stock. 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 financial daily mentioned.
Not only Robinhood but Brokerages said newly-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,” the financial daily quoted as saying 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.
Worth mentioning here is that most Indians betting on these stocks do not subscribe to initial public offerings (IPOs) as 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, the Et report mentioned.
“Since the stock got listed, Robinhood has been the top 10 most bought stock on our platform,” Viram Shah, chief executive officer, Vested Finance, told ET. “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,” the financial daily quoted as saying 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.”
The trend is expected to continue in the short run since several big-ticket listings are scheduled on the Nasdaq in the coming months. Private Investment firm Healthcare Royalty Partners is looking to raise $750 million later this month. Electric carmaker Rivian, which was last valued at $50 billion, is eyeing a late 2021 listing, media reports suggest.