By ipomarket.in Editorial Team · Last reviewed: 2026-09-29
Disclaimer: This article is for informational purposes only and does not constitute investment advice. IPO investments are subject to market risks. Please read the offer document carefully and consult a SEBI-registered investment advisor before investing.
Non-Resident Indians (NRIs) can and do participate in Indian IPOs, but the rules differ from those that apply to resident investors. Your account type decides how much money you can send back home, your country of residence can decide whether a broker will accept your application at all, and a newer route through GIFT City has quietly opened up a dollar-denominated alternative. This guide walks through what is settled regulation, what is still early-stage, and what you need to check before you apply.
Who counts as an NRI
Under Indian law, your residency for investment purposes is decided under the Foreign Exchange Management Act (FEMA). Broadly, an individual who spent fewer than 182 days in India during a financial year is treated as a non-resident. This is what triggers NRI-specific investment routes and the compliance that comes with them. Your tax residency under the Income Tax Act can be assessed separately, so it is worth confirming both.
Applying to a domestic IPO (NSE/BSE)
The domestic market remains the primary and most familiar route for most NRIs.
The ASBA mechanism
SEBI mandates that IPO applications go through ASBA (Application Supported by Blocked Amount). Your application amount is blocked in your bank account and only debited if shares are allotted to you. If you are new to how bidding and allotment work, our explainer on the IPO allotment process covers the sequence in detail.
Company permission matters
Here is a point many first-time NRI applicants miss: NRI participation is subject to the issuing company allowing it. Whether NRIs (and the specific route, repatriable or non-repatriable) are permitted is set out in the Red Herring Prospectus. Reading that document is a habit worth building; our guide to what a DRHP is and how to read it explains where to look.
All applications are made in Indian rupees, and investments run through your NRE or NRO bank account.
You do NOT need a PIS account
A common misconception is that NRIs need a Portfolio Investment Scheme (PIS) account to apply for an IPO. According to SEBI guidance, the PIS requirement applies to secondary-market trading of listed Indian equities, not to primary-market IPO applications. So a PIS account is not a prerequisite for applying in an IPO.
NRE vs NRO: the repatriation difference
The account you use to apply changes what you can do with the money later.
- NRE (repatriable) route: Funds and sale proceeds from an NRE account are fully repatriable, meaning you can send the money back to your country of residence without a cap.
- NRO (non-repatriable) route: NRO account repatriation is capped at USD 1 million per financial year, subject to applicable tax and documentation.
If you expect to move IPO gains abroad, the NRE route offers more flexibility, but it is only available if the issuing company permits repatriable NRI investment. Confirm this in the prospectus before you apply.
The US and Canada hurdle
If you are an NRI based in the United States or Canada, expect friction. Several leading Indian brokers and asset managers do not accept IPO applications from US- and Canada-based NRIs because of the compliance burden imposed by American and Canadian securities regulators. This is not a blanket legal ban across all platforms, but it is common enough that you should confirm eligibility with your specific broker before assuming you can apply. Do this upfront rather than at the moment an IPO opens.
A note on secondary trading
Separate from IPOs, NRIs have historically been restricted to delivery-based trading in the secondary market and could not do intraday trading. Reporting suggests SEBI relaxed some of these restrictions for non-PIS accounts in July 2025, allowing intraday and derivatives access through certain brokers. Treat this as evolving; confirm the current position with your broker, as implementation varies.
GIFT City: the newer, dollar-denominated route
GIFT City's International Financial Services Centre (IFSC) has emerged as a distinct avenue for non-residents, and the framework changed materially in 2024.
What the June 2024 reform did
SEBI issued circulars on 26 and 27 June 2024 amending the SEBI (FPI) Regulations, 2019. The headline change: NRIs and Overseas Citizens of India (OCIs) can now own up to 100% of Foreign Portfolio Investors (FPIs) based in GIFT City. Previously, individual NRI/OCI contributions were capped at under 25% of an FPI's assets, with a combined limit of 50%. This is a significant loosening for non-resident participation through the IFSC route.
It is a non-resident-only zone
Since 2018, the RBI has treated the GIFT City IFSC as a non-resident zone. Under FEMA, an entity within the IFSC is considered non-resident, so when an NRI invests here the transaction is treated as non-resident to non-resident. As a result, resident Indians are not permitted to invest directly in GIFT IFSC equity listings, per IFSCA regulations. Residents can remit up to USD 250,000 a year abroad under the Liberalised Remittance Scheme, but equity IPOs on IFSC exchanges are restricted to non-residents.
The first GIFT City equity IPO
XED Executive Development became the first company to launch an equity IPO from GIFT City. The offer opened on 6 March 2026 and closed on 18 March 2026, running for nine working days, with shares priced at USD 10 to USD 10.5 each. The shares list on both NSE IX and India INX. We covered this milestone in detail in GIFT City's first IPO explainer.
To participate in GIFT City IPOs you generally need an IFSC trading account and a GIFT City bank account. US-based NRIs are eligible under the IFSCA framework, but US tax reporting obligations such as FBAR and FATCA still apply to these investments.
The reality check
GIFT City's equity market is brand new. Trading volumes are thin, and early investors should plan for potentially longer holding periods. The IFSCA has announced a Market Making Programme (2025–2030) aimed at improving liquidity, but that is a stated intention rather than established practice today. There is also no universal minimum investment; each offering sets its own lot size and price band. And GIFT City is not a blanket zero-tax haven for individuals: your personal tax outcome depends on your residency, the product, and your home country's rules.
Quick comparison
| Feature | Domestic IPO (NSE/BSE) | GIFT City IPO (IFSC) |
|---|---|---|
| Currency | Indian rupees | US dollars (e.g. XED priced in USD) |
| Who can apply | NRIs if company permits | Non-residents only (NRIs/OCIs) |
| PIS account | Not required for IPO | IFSC trading account needed |
| US/Canada NRIs | Often restricted by brokers | Eligible under IFSCA framework |
| Market maturity | Established, liquid | Very new, thin volumes |
What to check before you apply
- Does the prospectus permit NRI investment, and on which route (NRE/NRO)?
- Will your specific broker accept applications from your country of residence?
- Which account gives you the repatriation flexibility you want?
- For GIFT City, do you have the IFSC trading and bank accounts in place, and have you understood your home-country tax reporting?
For the mechanics that apply to all applicants, our guide on how to apply for an IPO online in 2026 is a useful companion.
FAQ
Do NRIs need a PIS account to apply for an Indian IPO?
No. Per SEBI guidance, the Portfolio Investment Scheme requirement applies to secondary-market trading of listed shares, not to primary-market IPO applications. NRIs apply through their NRE or NRO account using the ASBA mechanism.
Can US-based NRIs invest in Indian IPOs?
It depends on the platform. Several Indian brokers and AMCs decline applications from US- and Canada-based NRIs because of American and Canadian regulatory compliance requirements. For GIFT City equity IPOs, US-based NRIs are eligible under the IFSCA framework, though US tax reporting rules like FBAR and FATCA still apply. Confirm eligibility with your broker before applying.
What is the difference between the NRE and NRO route for IPOs?
Sale proceeds from the NRE (repatriable) route can be sent abroad without a cap. The NRO (non-repatriable) route allows repatriation up to USD 1 million per financial year, subject to tax and documentation. The route available to you depends on what the issuing company permits.
Can resident Indians invest in GIFT City IPOs?
No. Under IFSCA regulations, GIFT City equity IPOs are restricted to non-residents. The RBI treats the IFSC as a non-resident zone under FEMA, so direct equity investment in IFSC listings is not open to resident Indians.
How many GIFT City equity IPOs have happened so far?
As of March 2026, XED Executive Development was the first and, per our research, the only confirmed GIFT City equity IPO. No official pipeline of future GIFT City equity IPOs has been published.
Last reviewed: 2026-09-29.