How To Buy NVIDIA Shares In India

For those investors who are keen on broadening their investment horizons and tapping into the global markets, the prospect of investing in foreign stocks can be an enticing one. A stock that has been making waves in the global investment community is NVIDIA Corporation NVDA.

Known for its pioneering work in the realm of graphics processing units (GPUs) and artificial intelligence (AI) technologies, NVIDIA has become a sought-after stock for many. The interest in the technology has grown exponentially especially since NVIDIA’s share price has climbed to new heights in the past few months. The stock is up over 240% in the past year.

If you’re contemplating adding NVIDIA shares to your portfolio from India, this guide is designed for you. We aim to simplify the process, offering valuable insights and steps to help you understand the nuances of international investing.

NVIDIA: The Company

Founded in 1993 by Jensen Huang, Chris Malachowsky, and Curtis Priem, NVIDIA has revolutionized the tech industry with its pioneering GPUs and AI technologies. From gaming to professional visualization, data centers, and automotive tech, NVIDIA’s innovative products have made significant impacts across diverse sectors. The company’s unwavering commitment to innovation and its vision for an AI-centric future have garnered global recognition.

CEO Jensen Huang has played a pivotal role in NVIDIA’s success, driving impressive growth and shaping market perceptions. His forward-looking vision for AI and high-performance computing has guided the company’s mission. Huang’s dynamic leadership and innovative strategies have earned the trust of investors and consumers alike, solidifying NVIDIA’s position as a leader in the tech landscape.

See also: How To Buy Tesla Shares In India

Inroads In India

Over the past six months, the chip giant has focused a lot of its attention on India. Ever since the company CEO came to India in late 2023, the company has announced several collaborations with Indian companies.

The U.S. company partnered with Reliance Industries and Tata Group to build foundational large language models and high-performance AI computing environments respectively. It also inked a deal with Infosys, where the firm aimed to bring generative AI applications and solutions to enterprises.

NVIDIA further collaborated with L&T Technology Services Limited to revolutionize medical devices through the development of a software-defined architecture. It also announced a partnership with another IT giant Wipro.

NVIDIA Fundamentals

NVIDIA’s fourth-quarter revenue, ending January 28, surged to $22.1 billion from $6.05 billion in the previous year, marking a substantial increase. The company, headquartered in Santa Clara, California, reported earnings of $12.29 billion, a notable rise from $1.41 billion in profit recorded in the same period a year ago.

The earnings beat most expectations and helped the US markets surge further

Here’s a snapshot of NVIDIA’s financial performance over the past four years:

Period EndingTotal Revenue Gross Profit Net Profit
January, 202326.9715.354.36
January 202226.9117.479.75
January 202116.6710.394.33
January 202010.916.762.79
All figures in $ Billions.

The table clearly shows steady growth in the company's earnings and revenue. However, it’s important to remember that while financials are a key consideration, there are several other factors an investor should consider before investing in NVIDIA shares.

Factors Affecting NVIDIA’s Share Price

  1. Trends in the Tech Market: The global growth and adoption of AI and high-performance computing can significantly impact NVIDIA's share price. Positive trends and increased demand for these technologies can boost investor confidence in NVIDIA, potentially leading to an increase in the share price.
  2. Innovation and Product Launches: NVIDIA’s capacity to innovate and introduce new products is a key factor watched by investors. Successful product launches and technological breakthroughs can positively influence NVIDIA’s share price, while any setbacks could have a negative effect.
  3. Financial Performance: NVIDIA's quarterly financial results play a crucial role in shaping investor sentiment. Robust revenue growth, profitability, and positive cash flow can contribute to a favourable perception of the company's prospects and potentially drive the NVIDIA share price higher.
  4. Regulatory Landscape: Changes in government policies, regulations, or incentives related to technology and AI can impact NVIDIA's share price. Supportive policies and incentives can create a conducive environment for NVIDIA's growth, while adverse regulatory changes might lead to increased volatility.
  5. Competition in the Tech Market: The technology market is highly competitive, with several established tech giants and new entrants vying for market share. Investors closely monitor NVIDIA's ability to maintain its competitive edge, innovation, and market leadership, which can affect the company's share price.

Investing in NVIDIA Shares from India

Setting Up a Foreign Trading Account

The first step to investing in NVIDIA shares from India is to open an overseas trading account. Some well-regarded brokerage firms in India that offer access to international markets include:

  • HDFC Securities: A leading brokerage firm in India that provides trading access to global stock exchanges.
  • Kotak Securities: A reputable brokerage firm that enables investors to trade in international stocks, including NVIDIA.
  • ICICI Direct: ICICI Direct offers a variety of investment options, including services for international stock trading.

Select a brokerage firm that meets your needs, offers competitive fees, and provides an intuitive trading platform. Follow the brokerage firm's instructions and provide the necessary documentation to open your demat account.

Understanding the Tax and Fee Structure

Investing in foreign stocks involves various fees and taxes, over and above the cost of the actual NVIDIA share price. Here are the charges and taxes you will be required to pay:

  • Tax Collected at Source (TCS): Under the RBI's Liberalised Remittance Scheme (LRS), a 5% TCS is imposed on all remittances exceeding Rs 7 lakh. This tax is applicable only to the amount exceeding ₹7 lakh, not the entire sum. However, with the recent changes made by the government under the Finance Act 2023, this will go up significantly. From July 1, 2023, you will be charged a 20% TCS on these investments. Also, the threshold of ₹7 lakhs has been removed, so if you invest ₹12 lakhs after June 30, TCS would be charged for the entire amount and not just ₹5 lakhs.
  • Capital Gains & Dividend Tax: For Indian citizens, dividends from US stocks are subject to a 25% tax rate. However, thanks to the Double Tax Avoidance Agreement (DTAA), investors can receive a tax credit for taxes paid abroad, ensuring they are not taxed twice on the same income. In India, you are also required to pay taxes on capital gains.
  • Brokerage Fees: Brokerage firms impose fees for buying and selling shares. This differs from broker to broker and is more often than not higher for investing in foreign stocks.
  • Bank Charges: Most banks charge fees for foreign exchange conversion and transfers. Additionally, there may be a one-time account setup fee. Total banking charges are usually around 4% to 5% of your total investment amount including commission and GST.
  • Foreign Exchange Rate: The foreign exchange rate at the time of purchase or withdrawal can impact costs and the number of units allocated.

Considering the extensive list provided, it is evident that purchasing NVIDIA shares in India can be quite expensive. Therefore, it is crucial to conduct thorough research before proceeding. Additionally, it is important to note that there is a yearly cap of $250,000 (approximately ₹2 crore) for Indian citizens for such expenses.

Keeping Track of Your Investment

Once you’ve purchased NVIDIA shares, it's vital to monitor your investment regularly. Stay updated on NVIDIA's financial performance, news, and market trends that could affect the NVIDIA share price. You can check the NVIDIA share price anytime using your trading platform or even a simple Google search for NVIDIA share price will get you the desired result.

Must Read: Top 10 Richest People In India

Disclaimer: Benzinga India doesn't give financial advice. The above article is for educational purposes alone.

Editor's Note: Artificial intelligence was used as a secondary aid in the writing of this story.

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