As an Indian investor, it's possible to make some serious money in the booming US IPO market.
A big IPO party has kept the US stock market in a state of frenzy, rewarding investors big time. The index of US IPO stocks has already generated more than 100 per cent returns in 2020 and the momentum appears to roll into 2021 as well. While the market has recently witnessed a slew of IPOs becoming a part of the US stock market indices, the bandwagon of upcoming US IPOs is led by some other big Unicorns of the tech industry.
Moving into 2021, several billion dollars will be up for grabs by the public during the listing of these new IPOs in the US stock exchanges. The good news is that even Indian investors looking to benefit from the US IPOs can do so without much hassles.
Although the US IPO market has been active lately, DoorDash and Airbnb with their multibillion-dollar initial public offerings (IPOs) in December 2020 have set the ball on fire. While the food-delivery service DoorDash Inc. posted nearly 86 per cent in its public debut, the share of Airbnb Inc., the home-rental company, more than doubled a day later, seeing its value surpass $100 billion after having one of the biggest first-day rallies. Airbnb remains the biggest IPO of the year, raising $3.5 billion.
Even as an Indian investor, it’s possible to make some serious money from the booming US IPO market. If you are looking to invest in the US IPO stocks from India, you just need to open a trading account with an international investing platform. The process is extremely simple and easy to complete.
You can invest in the US stocks from India or trade in Tesla shares, all from the comfort of your home or office. “It’s very straightforward now that platforms like Stockal are offering this in India. To open a Stockal account (which in-turn gives you a US brokerage account), one can just go online and open an account digitally, upload scanned copies of ID and address proof and that’s it. Once the account is opened, funds can be remitted in this account via online banking with most large Indian banks,” says Sitashwa Srivastava, Founder and CEO, Stockal, an international investing platform.
What makes most US IPOs stand out is the environment in which they thrive. The US stock market has all the essentials in place – the strength of its 20 trillion economy, global firms of China, Japan and other developed countries listed on their stock exchanges, the high volume of trades, the huge market capitalisation of stocks thus providing liquidity, a transparent, yet strict financial market regulations and above all, low-cost investing options. New firms in their early stages of growth with potential of big earnings in future fuel the performance of IPO stocks once listed on stock exchanges.
And, if you are wondering how much time will it take to get your hands on the new IPOs yet to open in the US market, here’s what Srivastava says. “I would recommend starting the process a week before an IPO is scheduled. Retail investors are generally unable to get shares at IPO price in the US, but the moment a stock begins trading, one can invest. Stockal saw massive interest for AirBnB and Doordarsh earlier this month. Every month, we are now seeing almost 5,000 new accounts being opened on Stockal and we have processed over $230 million in transactions in 2020.”
Going into 2021, there doesn’t appear any reason for the momentum in the US IPO market to take a pause. The long term investors in such stocks can get kicker-of a return in their portfolio by allocating some portion of funds into them. However, as the risk-reward ratio is high, it always helps to make an informed buying decision.