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The below content is purely for informational purposes and is not intended to constitute advisory of any kind. Please note, these are in-depth articles which are best viewed on large screen devices like laptops, desktops and tablets. The position reflected in this article has been updated as of April 15, 2024.

The Initial Public Offerings (IPOs) in the Indian stock market have always been of interest to both, domestic and international investors. This article explores the intricacies of investment in Indian IPOs by Non-Resident Indians (NRIs), Persons of Indian Origin (PIOs), and Overseas Citizens of India (OCIs), right from the application process to repatriation and taxation rules.


Can NRIs buy IPOs in India?

Yes, NRIs, PIOs and OCIs can invest in Indian IPOs. However, this is subject to the issuing company permitting NRIs to subscribe to the IPO. You should check the Red Herring Prospectus (RHP) of the issuing company to ascertain if the Securities and Exchange Board of India (SEBI) has permitted IPO subscription for NRIs.

Please note that you can make investments in IPOs in India only in Indian rupees.

You should consult your bank or broker for more details.

Did you know?

Red Herring Prospectus is a document that contains important details such as the company's operations, finances, IPO structure, management, risks and intended use of funds. It helps the investors make informed decisions about participating in the IPO.


Prerequisites to invest in Indian IPOs

To start investing in IPOs in India, NRIs do not require a Portfolio Investment NRI Scheme (PINS) designated bank account. NRIs can subscribe to IPOs through their non-PINS bank accounts i.e., their NRI bank accounts. As per SEBI guidelines, to start investing, you will need to: 


Please note, a trading account is not essential for applying to IPOs but is required for the subsequent sale and settlement of the allotted shares. 

Leading banks like ICICI Bank, provide a 3-in-1 NRI account, combining your demat, trading and bank accounts. 

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How to invest in IPOs

SEBI has mandated usage of Application Supported by Blocked Amount (ASBA) for IPO applications. This means that once you apply for an IPO (either online or offline), the investment amount will be blocked in your account through ASBA until the share allotment. Upon successful allotment, the funds are released to the issuing company to complete the transaction. However, if your IPO bid is not successful, the blocked funds are automatically released back to your account. 

Like resident Indians, NRIs like you can invest in Indian IPOs by:

  • Submitting an offline IPO application through your bank or broker 
  • Submitting an online application through your bank using net banking facilities, or Unified Payments Interface (UPI) ID linked to your NRE/NRO bank account
  • Submitting an online bid using your 3-in-1 NRI account 

Post application, the investment amount will be blocked in your account until the share allotment, as per the extant process.

ICICI Bank customers can submit a bid and manage their demat account through their iMobile Pay application. 

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Repatriation and taxation of sale proceeds

NRIs have the flexibility to repatriate funds invested in Indian IPOs, along with any capital gains. You can repatriate the full amount of the sale proceeds if the investment was made through your NRE account. In case, the investment was done using an NRO account, the proceeds are repatriable only up to USD 1 million per Financial Year (April–March), subject to necessary documentation and tax compliances. This USD 1 million limit is applicable for capital income sources. For current income sources, while there is no upper limit on repatriation of funds, it is subject to documentation and source of funds. 

You might want to get in touch with your bank for details.


Tax implications on capital gains

Any income earned from stock market investments, including IPOs, is subject to taxation in India. In terms of capital gains taxation, NRI tax treatment aligns with that of resident Indians. The tax rates are listed in the table below:

Please note, tables are best viewed on desktops and in landscape mode on mobile phones.

Type of investment income Holding period Rate of tax

Gains earned from sale of equity shares listed on National Stock Exchange (NSE)/Bombay Stock Exchange (BSE) and subject to Securities Transaction Tax (STT)


> 12 months

Long-term Capital Gain (LTCG)

Any gain above ₹ 1 lakh is taxed at 10% + applicable surcharge and cess

Gains earned from sale of equity shares listed on NSE/BSE and subject to STT

Up to 12 months
Short-term Capital Gain


15% + applicable surcharge and cess

Interest and dividends

Not applicable

As per your income tax slab*

*These tax slabs are defined as per the Finance Act, 2023.

It is important to note that Tax Deducted at Source (TDS) will be applicable on the investment income as mentioned above.
If you are filing tax in a foreign country, check for the Double Tax Avoidance Agreement (DTAA) between India and your country of residence. 

You should get in touch with your financial advisor/tax expert for the latest slab rates or any changes in regulations to ensure compliance.


NRIs can participate in IPOs, provided the issuing company permits NRI investments. To subscribe to Indian IPOs, NRIs need to have an NRE/NRO bank account, a PAN card and an NRI demat account. You do not require a PINS designated NRE account for investing in Indian IPOs. Sale proceeds from NRE accounts are fully repatriable, while NRO accounts have a USD 1 million limit per financial year. Like resident Indians, NRIs are subject to taxation on the income generated from such investments. You should consult a tax expert for more details.

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