Are NRIs allowed to invest in IPOs, ETFs, and corporate actions?
NRIs (Non-Resident Indians) can apply for IPOs, invest in Exchange Traded Funds (ETFs), and receive corporate action entitlements (such as rights and bonus shares) in line with FEMA/RBI rules and issuer policies. Eligibility and process depend on your account setup and bank support.
IPO investments for NRIs
NRIs can apply for IPOs using a Demat account linked to an NRO Non-PIS account. This route is widely accepted by issuers and uses a familiar UPI flow (subject to bank support for UPI on NRO accounts).
- Regulatory simplicity: No per-issue RBI permission required on the NRO Non-PIS route.
- Wider acceptance: Many issuers allow NRI applications via NRO accounts.
- UPI process: Application via UPI is possible where the NRI’s bank supports UPI for NRO accounts.
ETF investments for NRIs
ETFs trade like shares on NSE/BSE and are held in Demat form.
- Account routes: Repatriable via NRE PIS; non‑repatriable via NRO Non‑PIS.
- Coverage: Equity, debt, gold, and thematic/sector indices.
- Dealing: Buy/sell on exchanges similar to listed stocks.
Corporate actions for NRIs
NRIs are eligible to receive corporate action benefits (e.g., rights issues, bonus shares) in proportion to their existing holdings, subject to FEMA/RBI conditions and issuer compliance.
- Sectoral caps: Post‑allotment foreign shareholding must remain within prescribed limits.
- Same account credit: Entitlements are credited to the same Demat account as the original holdings.
- Rights payments (if applicable): Pay from the same source account type used for the original purchase (NRE/NRO) to remain compliant.
Always check the IPO Red Herring Prospectus (RHP), ETF scheme details, or company announcements for NRI eligibility and specific instructions.
What if…
| Scenario | What you should know |
|---|
| Applying for an IPO via NRE PIS | Applications may be rejected by the issuer due to compliance restrictions; NRO Non‑PIS is commonly accepted. |
| Issuer excludes NRIs in the offer | Participation is not permitted for that issue; check the RHP/announcement. |
| Bank doesn’t support UPI on NRO | UPI applications cannot be completed through that bank; use a bank that supports UPI for NRO accounts. |
| Receiving rights/bonus shares | Entitlements are credited in proportion to holdings; no fresh RBI approval is typically required if sectoral caps are not breached. |
| Issuance may breach sectoral caps | The company must obtain RBI clearance; otherwise, the allotment cannot proceed. |
| Repatriation of ETF sale proceeds | Permitted when invested via NRE PIS; NRO Non‑PIS route is non‑repatriable (subject to applicable rules). |
Last updated: 12 Aug 2025
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