How to Invest in Meta (Facebook) from India: All You Need to Know!
One of the Big Five American IT companies, Facebook, now known as Meta Platforms, has a very interesting history in the stock market. On May 16, 2021, when Facebook became a listed company through the IPO, it raised $16 billion from the market. This made Facebook register market capitalization of more than some of the top American companies like Amazon, Disney, and McDonald’s. Within a period of less than 10 years, Facebook’s stock price surged by almost 10 times, giving early investors over 1000% returns. If you want to invest in Facebook shares or are looking for the answers to how to invest in Meta shares from India, you are at the right place. We will discuss what are the benefits of making Meta investment in India, and explore all the ways how to invest in Meta from India.
Why Invest in Meta Shares from India?
Meta is one of the biggest tech giants in the world. It controls the world's most used and popular social media and messaging platforms such as Facebook, Instagram, and WhatsApp. With a market capitalization of around $ 590.21 billion, Meta is one of the best US companies that one can invest in. There are a number of benefits of investing in US companies like Meta.
Geographical Diversification: Investing in Meta helps you to diversify your investment portfolio geographically. Geographical diversification helps you to contain investment risks and allows you to stabilize your returns. When you invest in US stocks like Meta, you get the chance to capitalize on the growing US market even when the domestic market fails to perform as per expectation.
US Market Performance: The US market is the world’s top market in terms of market capitalization. It also lists most of the biggest companies of the world across all the industries. When you invest in Meta, you get the chance to earn high and stable returns in the long term. Stocks of companies like Meta are very strong and have proved to offer substantial returns to the investors in the long run.
Strong US Dollar: While investing in Meta, you will be paying in Rupees that get converted into Dollars before the shares are purchased. This gives you the advantage to capitalize on the strong and appreciating US Dollar. In 2010, the USD was around INR 45, and now it is over INR 75. This translates into an increment of 66% in 12 years. By investing in Meta, or any other US stock, you can earn this extra return over the years of your investment. For example, if you would have invested $100 in Facebook in 2012, which roughly converts into INR 5,300, your investment would have become INR 7,500 considering that the stock’s price remains unchanged in this 10 years period. You would have gained over 40% only through appreciation of the Dollar or depreciation of the Rupee.
Fractional Investment: When you invest in Meta shares, you will have to pay around Rs 16,500 in order to own just 1 unit of the stock. However, making a Facebook investment in India gives you the benefit of the fractional investment feature. With fractional investment, you can also own a fraction of Meta shares based on the amount you wish to invest. For example, if you have Rs 5,000 to invest in Meta, you will get 0.3 units of the stock. With this feature, you can use your capital to invest in multiple such stocks and diversify your US stocks portfolio.
Performance of Meta: The price of Facebook (now Meta) has surged over 1000% (as per 52-week high) since the company’s listing on the US stock market. In the last 5 years, the stock has gained over 60%. If you invested Rs 10,000 in Facebook stock 10 years ago, your investment would have turned Rs 10,00,000 by October 2020. The Meta stock has a P/E ratio of 15.66 which makes it a very valuable stock to invest in.
How to Invest in Meta (Facebook) Shares from India?
There are two answers to how to buy Meta stock or how to buy Facebook shares in India. These three ways are-
- Indirect ways- Mutual Funds that invest in Meta stocks and ETFs that follow index where Meta stock is listed
- Buying Meta stocks directly
Indirect Investment in Meta:
If you wish to invest indirectly, you could choose a Mutual Fund (MF) or Exchange-Traded Fund (ETF) that invests in global equities.
1) Mutual Fund
Mutual funds are basically the tool that collects funds from the investors and then further invests it in a gamut of shares and securities. Certain Indian funds are eligible to invest their funds in the US Stock Market. Some of those funds include:
Exchange-Traded Funds are the funds that track any asset, commodity, or index that can be transacted at the stock exchange. The ETFs can be structured to track anything, from a single security to a large portfolio of securities as per the strategies of the fund. There are certain funds available that provide direct investments in US Equities. These are:
Advantages of Indirect Investing in Meta:
Investing indirectly or through mutual funds and ETFs in the Meta stock helps you to contain market risks and stabilize your returns in the long run. For example, after making its all time high of $ 383.33, the Meta stocks have corrected sharply to $217 (48% decline) in just 4-5 months, which is only $3 more than its 52-week low. In the same period, NASDAQ declined only by 13%. This shows that if you would have invested in a NASDAQ based mutual fund that has holdings in Meta or an ETF scheme that tracks the NASDAQ index, you would have saved over 25%.
The NASDAQ based mutual funds or ETF schemes are managed by experts who know how much and when to invest in Meta or any other stocks. Based on their knowledge, they target the best possible returns and least possible loss from your invested funds in the scheme.
Disadvantages of Indirect Investing in Meta:
You Don’t Own the Shares
Indirect investment through mutual funds and ETFs don’t give you the actual ownership of the stock. This means you cannot buy/sell the stock freely as per your will. The entire control remains in the hands of the fund managers, and the only thing you could do is invest more or redeem the fund’s units.
No Direct Returns
Since such mutual funds or ETFs are not entirely based on Meta stocks, you won’t be able to earn substantial returns in case the Meta share’s price skyrockets or surges steeply in a period.
Mutual funds bring a number of charges like Exit load, Expense ratio, etc. that have to be borne by the investors. These extra charges/fees reduce the net returns that you would have earned from your investments.
If you wish to own Meta stocks directly and not through mutual funds or ETFs, you can do so easily using the INDmoney investment platform that makes investing in Meta shares or any US stock as easy as investing in Indian stocks. With INDmoney investment platform, you do not need to explore indirect or third party options to invest in Meta stocks.
Creating an US stock account with INDmoney is completely free and now it's easier than ever. You can open your 2 in One US Stocks Account in just a few clicks for free. INDmoney charges Zero Brokerage and Zero Transaction Fees for your US stocks account. You also get the best Exchange Rates i.e. more Dollars for your Rupees.
Follow these 5 easy steps to get onboarded:
Step 1: Download the INDmoney app and then click on the US stocks icon.
Step 2: Create a free 2 in 1 US Stocks Account.
Step 3: Enter your PAN and Aadhar details and upload your PAN’s image.
Step 4: Fund your IND Super Saver account first to add funds in US stocks account.
(Zero transfer fees with best exchange rates)
Step 5: Last step is to upload your latest IT return or 1 year bank statement.
Watch this video explaining the onboarding journey in detail:
Reinventing Investing in US Stocks
Advantages of Direct Investing in Meta:
Option to Earn Higher Returns
Unlike mutual funds and ETF schemes which are based on a number of stocks, investing directly in Meta stocks will allow you to capitalize directly on the stock’s performance. If the stock’s price surges, you will earn higher returns.
By buying Meta stocks directly, you will have complete control over the stocks. You can sell them anytime you want instantly without waiting for a day to get the investments redeemed. You will also receive dividends directly from the company without any hassle and unnecessary complications.
Along with the benefit of the fractional investment feature in Meta and other US stocks, you won’t have to bear additional investment, maintenance, and disinvestment fees that come with mutual funds. You do not have to keep paying throughout the holding period of your investment in Meta stocks.
Disadvantages of Direct Investing in Meta:
The only disadvantage of direct investing in Meta stocks is the associated market risks which are higher than mutual funds and ETFs. However, Facebook or Meta stock has performed sufficiently well in the long term. Therefore, you can earn healthy returns from buying Meta stocks and holding the same for long.
Meta Platforms is one of the largest tech giants in the world and owns all the major social media platforms used by millions of users. The company is also actively working on Metaverse projects and Augmented and virtual reality gaming, which is being considered as the future of gaming by experts. The company keeps on investing and acquiring platforms that connect people. Now, with digital education, e-connect and online seminars at the height of their popularity, we can expect Meta Platform’s stock prices to witness further uptrends in the coming future.
Is there any remittance limit on investment in US stocks?
Yes, the Reserve Bank of India or RBI has set a remittance limit of Rs 2.5 lakhs every year on investments made in US stocks.
Do I pay taxes in both US and India to buy and sell US stocks or on capital gains from the same?
India and the USA have a Double Taxation Avoidance Agreement (DTAA) signed in order to save Indian residents from double taxation. The capital gains made from the sale/transfer of US stocks are taxed only in India.
What charges do I need to pay for investing in Meta and other US stocks?
You do not have to pay any setup or monthly fees if you buy US stocks using the INDmoney platform. Furthermore, there are no remittance fees as well.
What is the minimum investment amount to buy US stocks?
You can invest as little as Rs 100 to buy US stocks. The feature of fractional investment allows investors to invest money as per their ability and convenience and own US stocks based on the same.