SpaceX IPO explained: Can Indians invest and how does it work?

SpaceX is set to enter Wall Street, with an IPO valued at a whopping $1.75 trillion! The long-awaited listing has kicked off a rush among retail investors all chasing a slice of its rockets, satellites and AI empire, turning it into one of the most talked-about market moments in recent times.

Demand is already so high that bankers have reportedly received twice the number of orders compared to the shares available. The IPO is being called the biggest stock market launch in history. Now, many Indian investors are wondering whether an they actually get a piece of the IPO.

Can Indian investors buy SpaceX IPO?

For Indian investors, buying is possible but not through the IPO itself. Indians cannot take part in the direct IPO allotment, instead, they can invest only after the listing through secondary markets using international brokers under the Reserve Bank of India’s Liberalised Remittance Scheme (LRS).

Under LRS, Indian residents can send up to $250,000 per financial year abroad for permitted investments, subject to rules. This is a common route used by Indians for overseas investing.

India’s Foreign Exchange Management (Overseas Investment) Rules, 2022 also classify overseas investment into Overseas Direct Investment (ODI) and Overseas Portfolio Investment (OPI). For individuals, overseas investing is allowed within these rules and the LRS limit, as long as it is done through approved platforms and channels.

SpaceX IPO

SpaceX shares are expected to list on June 12 at a valuation of $135 (£100.84) or Rs 11,000 approximately. The company plans to sell 555.6 million shares to raise around $75 billion. According to reports, up to a quarter of the shares may be reserved for individual investors, instead of large funds and banks. This is higher than what is usually seen in big IPOs. SpaceX has also reportedly set aside as much as 30%, or about $22.5 billion worth of shares, for retail investors, which is rare for a major listing.

The stock will trade under the symbol SPCX. SpaceX has chosen a small number of brokerage firms to distribute IPO shares to retail investors in the United States. Investors will need an eligible brokerage account, meet minimum funding rules, and submit an expression of interest before pricing. Even then, getting shares is not guaranteed.

The shares will be listed on Nasdaq in New York. Even people who do not apply for the IPO may still end up owning some indirectly, as changes in some markets, including Nasdaq, could lead to SpaceX being included in index-tracking funds.

Here are the countries where eligible investors may be able to access the shares, depending on local rules: Argentina, Australia, Brazil, Colombia, Denmark, European Economic Area, France, Germany, India, Israel, Malaysia, Mexico, the Netherlands, New Zealand, Norway, Peru, Philippines, Qatar, Saudi Arabia, Singapore, South Africa, South Korea, Spain, Sweden, Switzerland, Taiwan, Thailand, United Arab Emirates, and the United Kingdom.

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