Last updated: 22 Sep, 2021 | 01:02 pm
Elon Musk's Tesla is poised to make its debut in India. Whether you can own a Tesla or not, you can own a bit of the company. Are you surprised? Well, don't be! Even though the company is listed on the Nasdaq, you can invest in Tesla from India just like you buy shares of an Indian company. When you invest in a global name like Tesla, you diversify your portfolio and become a part of the global growth story.
Tesla, with a market capitalization of $783 billion, is the seventh-largest company in the US.
Geographical Diversification: When you invest beyond the Indian market, you diversify your investments geographically. It is advisable to diversify your portfolio to reduce your risk. You should invest in diverse asset classes and sectors and, now, you have the option to invest in a different country too!
Rupee Depreciation: The US dollar is one of the strongest currencies internationally, with rare fluctuations. Your investments in the US dollar can help you in long-term wealth creation. The rising dollar and the declining rupee are also a motivation to buy Tesla shares in India. Investments in the US market provide generous and stable returns over the long term.
Share Price Returns: If you had invested Rs 1,00,000 in Tesla 10 years ago [Sept 2011: $5.16 per share approx.], then you would have Rs 2,29,26,168 [Sept. 2021: $759 per share approx.]. That’s a gain of whooping 22,821% in INR terms within 10 years. If the corresponding annual returns are calculated using the above growth, then Tesla provided 72.2% annually. These are just crazy returns!
Before we discuss how to invest in Tesla shares from India, bear in mind that you will have to adhere to the rules laid down by the Reserve bank of India. As per the current rules by RBI, you can remit up to $2.5 lakh in a financial year. Plan your investments as per the laws and guidelines laid down by the respective authorities.
Ways to Invest in Tesla from India -
You can invest in Tesla directly or indirectly. When you make a direct investment, you would open an account with an international broker and buy the company shares. 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:
3) Direct Investments
Another method is directly investing in Tesla stock. If a company is not listed in Indian stock exchanges, then how to buy Tesla shares in India? Well, to invest in Tesla shares in India is like investing in an Indian listed company with the help of the INDmoney platform. It enables Indian investors to directly invest in the American equity shares directly without having to invest in any fund.
The next question that comes to mind is what is the best way to buy Tesla shares in India? Three different ways to invest have already been discussed earlier. Now, let’s have a comparative analysis of the same:
The above infographics make it clear that investing directly in Tesla stock via INDmoney not only gives you the maximum returns but also saves on your expenses which acts like getting extra returns over and above the normal returns.
Also the problem with investing through the ETF/MF route is that you are unsure what proportion of the money gets invested in Tesla shares. Investing directly allows you to have control over your investment, and you can choose the exact amount you want to invest in the stocks of your choice.
World over, new technology and innovation is driving growth. Tesla, with its talented leadership, innovative product line-up and low-cost marketing strategy, is a company to look out for in the future. Investing in its shares gives you a chance to participate in its growth and create wealth.
The company has ambitious plans to manufacture 20 million electric vehicles yearly over the next decade. A factor that sets the company apart from other automakers is its ambition to make cars appreciating assets. It is common knowledge that automobiles lose value over the years and depreciate. However, Elon Musk insists that Tesla cars will appreciate once autonomous driving becomes a reality.
Tesla stocks could help you diversify your portfolio and give you a chance at long-term wealth creation. INDmoney, with its world-class trading platform, affordable services and instant processing, can help you kick start your foray into the international market. Always invest as per your risk appetite after thorough research.
Will I have to pay tax both in the US and India?
You will have to pay the capital gains tax only in India. As per the Double Taxation Avoidance Agreement (DTAA) between India and the US, no tax on capital gains gets deducted in the US for Indian residents.
What if I cannot afford to buy one full share of a company?
If you cannot buy a complete share, you have the option of buying a fractional share. A fractional share is a part of one share; it is a fraction of the whole share and, hence, its price is also a fraction. You can buy up to 0.00000001 of a share. With INDmoney, you can buy Tesla Inc stock in any dollar value or any other scrip you want.
What are the charges of investing directly in Tesla shares through INDmoney?