Kotak Securities has decided to offer foreign investment services, for that they have made a tie-up with Nasdaq-listed Interactive Brokers. The new alliance will be benefitted by both Indian and non-resident Indian customers, who invest in overseas stock markets, which is the latest in a series of brokerages capitalizing on the interest in international stocks.
Interactive Brokers, with a market capitalization of approximately $ 23.2 billion, exercise a direct presence in India through Interactive Brokers India Pvt. They can offer business on Indian Exchanges and an office in Mumbai. The recent surge in US equities and the rise of the US dollar against the Indian rupee have boosted investor’s interest in foreign equities. Tech-Heavy Nasdaq has achieved an annual growth rate (CAGR) of about 24% over the last five years. Under the Liberalized Remittance Scheme (LRS), Indian investors are allowed to pay up to $ 250,000 per year to invest in foreign stocks and bonds.
According to the Reserve Bank of India (RBI) for the financial year 2019-20, Indians paid about 431.41 million Dollars. The payment rose to $ 73.61 million in September 2020, from $ 27.37 million in the previous month. These figures are in line with the 5% Tax Collected at Source (TCS) for LRS payments above $ 7 million from October 1. TCS is unique in that it can be set against other taxes payable by the taxpayer. Tax Collected at Source is unique in that it can be set against other taxes payable by the taxpayer.
Managing Director and Chief Executive Officer of, Kotak Securities, Jaideep Hansraj stated that, they now have 2.25 million clients, of which 650,000 are active. Investors opting for this service will have to pay a flat brokerage rate of $ 1.99, regardless of the size of their trades.
Sitashwa Srivastava, the founder of Stokal, said in November, that since their partnership with HDFC Securities a year ago, they have added about 45 partnerships, including brokerages, advisors, and wealth management firms such as Motilal Oswal and Geojit. He further, added that while brokerage clients invest an average of $ 5,000-6,000 with them, wealth management clients show a ticket size of $ 50,000 and above.
