Space X IPO Rockets Musk To Trillionaire Orbit, Know How You Can Invest In Foreign Equities Sitting In India

The blockbuster initial public offering (IPO) of SpaceX has led to significant enthusiasm among not just US-based investors, but domestic investors, too. The stock was listed at $150 per share on Nasdaq on June 12, under the ticker SPCX. The stock closed its first day at $161, jumping 19 per cent in a record debut.

Notably, the record debut turned Elon Musk into the world’s first trillionaire, as the value of his holdings soared. According to a report by Forbes, the IPO is likely to have boosted Musk’s fortune to $1.10 trillion, as his net worth increased by $188 billion to an estimated $982 billion at $135 per share price. The buzz around the stock has generated excitement among retail investors in India who want to seek investment opportunities outside India to broaden their investment horizons.

How Can Indian Investors Invest Outside India

To invest beyond the NSE and BSE, Indian retail investors can utilise avenues, such as the Reserve Bank of India’s (RBI’s) Liberalised Remittance Scheme (LRS). This regulatory framework permits a resident individual to remit up to $2.50 lakh per financial year for permitted purposes, which explicitly includes making overseas investments.

Investors can exercise two different options for investing beyond borders. One option is to open a direct international brokerage account wherein an investor has to open a dedicated overseas trading account. Notably, this can be done either directly with a foreign brokerage firm or through domestic digital wealth platforms that partner with international broker-dealers to bridge the operational gap. 

In order to invest through a direct international brokerage account, investors can complete a digital know-your-customer (KYC) process to open a US brokerage account. Then they can instruct their bank to wire funds through a correspondent banking chain under the LRS framework. Once the rupees are converted to dollars and land in your brokerage account, you can actively trade. 

The other option which investors have is to invest through the GIFT City and Pooled Investment Vehicles route. This route allows investors to bypass cross-border banking logistics, currency conversion friction, and foreign tax traps. This method includes investing in traditional domestic mutual funds with international mandates, such as fund of funds (FoFs) or entities operating out of GIFT City.

Even though GIFT City is physically located in Gujarat, India, it is treated as a foreign jurisdiction under the Foreign Exchange Management Act (FEMA), 1999, and is governed by a unified regulator, the International Financial Services Centres Authority (IFSCA).  In this method, investors do not buy individual stocks and instead purchase units of a pooled fund structure like a GIFT City retail fund, alternative investment fund (AIF), or an outbound portfolio management services (PMS) strategy. The fund manager handles the actual cross-border deployment and equity selection.

How Does The Direct Route Differ For Foreign Equities

Viram Shah, founder and CEO of Vested Finance, an investment platform that enables Indian investors to invest directly in the US stock market, told Outlook Money that the buzz around Space X IPO is immense, as SpaceX alone contributed 15 per cent of the total trading volume on Vested Finance during its debut on June 12, 2026, with 25 per cent of all active users on that day participating in the stock.

“A marquee US listing tends to spark a wave of curiosity, and we do see that translate into people exploring global investing as a result,” Shah said.

Shah added that the operational workflow of buying international equities has also become increasingly streamlined for the average investor, which in turn, has spurred participation.

“Practically, what an investor does on a platform like ours is: complete a quick KYC, open a US brokerage account, move rupees across as dollars through their bank under LRS, and then buy US stocks and exchange-traded funds (ETFs), including fractional shares. So, a high-priced name isn’t out of reach even with a small ticket,” Shah said. 

He explained that while the onboarding process is simple, investors must note that the underlying mechanics differ fundamentally from trading on Indian exchanges. When a retail investor buys the shares of a domestically-listed company, the securities are stored in a rupee-denominated domestic dematerialised account. However, overseas investing introduces a currency leg on the way in and out.

He added that behind the scenes, the infrastructure relies on a custody model because India does not maintain a direct connection to US exchanges. Thus, instead of a standard dematerialised account, investors need to open a dedicated US brokerage account in their own name through an international broker-dealer entity, with a clearing and custody partner handling back-end execution and safekeeping.

“One thing that often surprises Indian investors is that in the US, shares are typically held in what’s called ‘street name’; the broker holds them through a custodian on the investor’s behalf, rather than each share sitting in an individual depository account the way NSDL or CDSL works here,” Shah said.

However, he clarified that the ownership of the US-listed stock remains fully with the investor, and the architecture is secured by Securities Investor Protection Corporation with protection of up to $5 lakh, which includes up to $2.50 lakh in cash, through the clearing firm.

Additionally, the timeline required to liquidate assets also changes when an investor invests in US listed stocks. While domestic trades happen within a local currency ecosystem, cross-border trades require a multi-step settlement loop. Thus, despite US equity markets operating on a T+1 settlement cycle, investors are able to withdraw proceeds from the sale of shares one business day after the transaction.

At this step, investors can choose between holding the cash in dollars, or initiating a formal international withdrawal to rupees.

“Once you initiate a withdrawal, the dollars are wired out of the US broker, travel back through the correspondent banking chain, and your Indian bank converts them to rupees at its TT buying rate before crediting to your account,” Shah said.

What Investors Must Keep In Mind While Investing Abroad

While the opportunity to diversify your portfolio beyond borders seems like a good idea, investors must also understand the various risks involved in the same.

Manasvi Garg, CFA, Securities and Exchange Board of India - registered investment advisor (Sebi RIA), and the founder of the wealth management platform Moneyvesta told Outlook Money that retail participants should carefully evaluate the distinct pathways available to them, as they carry profoundly different protections and legal obligations.

TCS Exemption and Estate Tax

Garg mentioned that the direct brokerage route requires investors to actively manage compliance under the FEMA, where mistakes can lead to regulatory queries. Investors also need to be mindful of exemption on tax collected at source (TCS), the threshold for which was raised from Rs 7 lakh to Rs 10 lakh from April 1, 2025.

Above the Rs 10 lakh threshold, a 20 per cent TCS rate applies to equity and debt investments, which can create a significant upfront cash-flow burden. Furthermore, direct ownership exposes individuals to unexpected foreign tax liabilities.

“The hidden killer is US Estate Tax, which is the single most underappreciated risk for Indian retail investors buying US stocks directly,” Garg said.

Garg added that if an India-based retail investor’s total US assets exceed $60,000, which is roughly Rs 56.80 lakh, he or she is liable to pay US estate tax in the case of their death. Notably, the investor’s holdings are taxed under the US Estate Tax even if both the investor and his or her nominees reside outside the US. Investors must also note that under LRS regulations, income or realised gains from overseas investments have to be mandatorily repatriated and surrendered to an authorised dealer in India within 180 days of receipt.

High Entry Costs and High Taxes

The GIFT City route offers investors a regulated fund structure as the pooled fund vehicle owns the underlying global securities. This also shields retail participants from direct US estate tax.

Recent reforms under the IFSCA Fund Management Regulations, 2025, require a minimum fund corpus of $3 million, independent custodians, and independent NAV calculations. However, investors must note that this route comes with its own limitations, including high entry thresholds, such as $5,000 for retail funds, $75,000 for outbound PMS strategies, and $150,000 for AIFs.

“Investors must complete separate KYC formalities with each asset management company (AMC). Systematic investment plan (SIP) facilities are still largely unavailable, and short-term gains generated within fund structures are taxed at roughly 42.74 per cent, making high-turnover investment strategies relatively inefficient,” Garg adds.

Risks Associated With Foreign Investing

Garg added that investors must also navigate inherent market risks, including currency fluctuations. While the recent depreciation of the rupee against the dollar can enhance international returns, high foreign exchange conversion spreads of 1-2 per cent can erode profits at entry and exit.

More importantly, global growth stocks which generate a lot of buzz at extreme revenue multiples tend to be vulnerable to sudden re-ratings. The valuation risk is relevant for trending market stories, he added.

“Global growth stocks often trade on very high expectations, and when those expectations are not met, prices can re-rate sharply,” Garg adds.

Additionally, for investing in the US market, retail investors often have to rely on unfamiliar accounting standards, such as the US Generally Accepted Accounting Principles (GAAP) standards and the US Securities and Exchange Commission (SEC) filings. In such situations, investors also often lack extensive broker coverage like they get in India. Add to the mix a 10-and-a-half-hour time zone difference which means critical price movements routinely occur while domestic investors are offline.

To conclude, investing in international markets can help investors diversify their portfolio to leverage the growth of stocks listed in other stock markets. However, long-term success in this domain depends on choosing the right structure and correctly assessing risk tolerance.