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.)