Brussels: Facebook’s announcement of an initial public offer (IPO) has investors worldwide looking for a slice of the social networking giant.
Facebook’s management is contemplating pricing the stock at between US$28–35 apiece. This will translate to about Rs 1,400-2,000 per share, depending upon actual IPO pricing and dollar value at the time. At those prices, the company is worth between $60 billion and $75 billion.
Indian investors are also eyeing the stock, which will be sold through NASDAQ in New York. India is the third most important nation for Facebook shareholders – it ranks third with around 45.8 m users, according to global social media and digital analytics company Social Bakers. This is approximately 5.4 per cent of total Facebook users.
If you are looking to buying a slice of Facebook, here are 5 easy steps on how to go about it under the Automatic Route:
• You can invest up to $ 25,000 every calendar year without any prior approval from RBI. This would mean that you can buy 714 to 892 shares of Facebook.
• You must furnish an application letter-cum-declaration in Form A2 stating the purpose of the remittance and declaration that the funds belong to you and will be used for specified and permitted purposes only.
• You must have maintained the bank account with a bank for a minimum of one year prior to the remittance. If you intend to make the remittance from a new bank account, the bank will carry out due diligence on the opening, operation and maintenance of the account.
• Further, you will have to provide a bank statement for the previous year to satisfy the bank about the source of funds. If you are unable to provide a bank statement, then you must furnish copies of either your latest Income Tax Assessment Order or your tax return.
• However, if you are an exporter or have balances in Export Earnings Foreign Currency (EEFC) accounts and / or with banks outside India, you can invest a higher amount subject to compliance with RBI Guidelines for Outbound Direct Investments.
(Sumeet Mehta is Managing Director of Paradigm Advisors. He is based in Mumbai.)
Facebook’s management is contemplating pricing the stock at between US$28–35 apiece. This will translate to about Rs 1,400-2,000 per share, depending upon actual IPO pricing and dollar value at the time. At those prices, the company is worth between $60 billion and $75 billion.
Indian investors are also eyeing the stock, which will be sold through NASDAQ in New York. India is the third most important nation for Facebook shareholders – it ranks third with around 45.8 m users, according to global social media and digital analytics company Social Bakers. This is approximately 5.4 per cent of total Facebook users.
If you are looking to buying a slice of Facebook, here are 5 easy steps on how to go about it under the Automatic Route:
• You can invest up to $ 25,000 every calendar year without any prior approval from RBI. This would mean that you can buy 714 to 892 shares of Facebook.
• You must furnish an application letter-cum-declaration in Form A2 stating the purpose of the remittance and declaration that the funds belong to you and will be used for specified and permitted purposes only.
• You must have maintained the bank account with a bank for a minimum of one year prior to the remittance. If you intend to make the remittance from a new bank account, the bank will carry out due diligence on the opening, operation and maintenance of the account.
• Further, you will have to provide a bank statement for the previous year to satisfy the bank about the source of funds. If you are unable to provide a bank statement, then you must furnish copies of either your latest Income Tax Assessment Order or your tax return.
• However, if you are an exporter or have balances in Export Earnings Foreign Currency (EEFC) accounts and / or with banks outside India, you can invest a higher amount subject to compliance with RBI Guidelines for Outbound Direct Investments.
(Sumeet Mehta is Managing Director of Paradigm Advisors. He is based in Mumbai.)
