Business · Markets · 2 hrs ago
Indian international ETFs trade at an average 30.4% premium
All six international ETFs in India traded above the value of their holdings on 30 September, by an average of 30.4%.
An ETF’s net asset value, or NAV, is the value of the investments it holds, so a premium means buyers pay more than that value.
Overseas investment limits have restricted Indian fund houses from buying more foreign securities and creating new ETF units.
The limits come from caps set by the Reserve Bank of India and the Securities and Exchange Board of India, and fresh allocations were halted after the ceilings were breached in 2022 and 2024.
At the same time, demand for global investments has risen as people seek to diversify beyond Indian shares.
Investors may pay very different prices for similar exposure: overseas-listed ETFs or direct investments may be available closer to the value of their holdings, though they involve a different route.
The sources do not say when fresh allocations might resume.
All six international ETFs in India traded at a premium on 30 September, averaging 30.4%, according to a Mint analysis of Value Research data.
The Motilal Oswal Nasdaq Q50 ETF had the highest premium, at 63%.
Regulatory limits on overseas investments have restricted Indian mutual funds’ ability to buy foreign securities and create new ETF units.
The premiums reflect limited supply alongside rising demand for global exposure, with changes to ETF price-band calculations also contributing.
- Who
- Indian investors and domestic fund houses offering international ETFs.
- What
- All six international ETFs in India traded above their net asset values, at an average premium of 30.4%.
- When
- 30 September; the article does not state the year for this data point.
- Where
- India.
- Why
- Overseas investment limits restrict funds’ ability to buy foreign securities and create new ETF units, while demand for global exposure has risen. Changes in ETF price-band calculations have also contributed.
This story does not have two clearly opposing sides.
Three of India’s six international ETFs traded at a discount, and the Motilal Oswal Nasdaq Q50 ETF had the steepest discount at 4%.
Fresh overseas investment allocations were halted after aggregate ceilings were breached.
All six international ETFs in India traded at a premium, averaging 30.4%.
- Average premium
- 30.4% on 30 September
- Highest premium
- 63% for the Motilal Oswal Nasdaq Q50 ETF
- RBI industry limits
- $7 billion for overseas non-exchange-traded funds and $1 billion for global ETFs
- Sebi limits per asset management company
- $1 billion in non-ETF investments and $300 million in ETFs
- LRS overseas equity and debt investment
- $2.6 billion in FY2026
What people are saying
The ability of an AMC to buy the underlying international stocks has gotten compromised due to the RBI-driven limits, which are translated by Sebi and distributed to AMCs. Since these limits allow finite creation of units, this leads to a premium
An increase in demand for global investing and the sentiment that one should diversify outside of India have raised the price of international ETFs. In the last 18-24 months, Indian markets have been flattish but global markets have performed well