There is a common frustration that many Indian investors encounter when they first look at US stocks. A single share of Amazon might cost over USD 200. A single share of Google (Alphabet) trades at a similar level. Berkshire Hathaway’s Class A shares are priced in hundreds of thousands of dollars. For most individual investors, buying even a single full share of some of these companies requires committing a significant sum just to get started.

Fractional trading solves this problem, and GIFT City is the regulated Indian route to access it.

What Is Fractional Trading?

Fractional trading, sometimes called fractional share investing, is the ability to buy a fraction of a single share rather than an entire share. So instead of buying one full share of a USD 200 stock, you can invest USD 20 and own one-tenth of that share. You receive proportional dividends, proportional price appreciation or depreciation, and all the economic benefits of full share ownership, just scaled to the fraction you own.

This concept has been popular in the United States for several years, offered by platforms like Robinhood, Schwab, and Fidelity. GIFT City now brings this capability to Indian and NRI investors through Indian-regulated platforms starting at just as minimum as USD 5 .

Why Does It Matter?

Access Without a Large Corpus: Not every investor has Rs 20 to 30 lakhs sitting idle to buy a basket of high-value US stocks. Fractional trading means you can start building a global equity portfolio with a few hundred dollars, or even less, and add to it gradually over time.

Diversification on a Budget: One of the core principles of long-term investing is diversification. With fractional shares, you can own small pieces of Apple, Microsoft, Tesla, Amazon, and Nvidia at the same time, without needing to commit tens of thousands of dollars. You get the benefit of sector and company diversification even with a modest investment amount.

Disciplined Regular Investing: Fractional trading supports the practice of regular, fixed-amount investing (similar to an SIP in mutual funds). Instead of waiting until you have saved enough to buy a full share of a high-value stock, you can invest a fixed dollar amount every month and accumulate fractions of multiple companies over time.

Full Participation in Market Returns: When Amazon or Google goes up 20%, a holder of fractional shares participates in that same 20% return, proportional to their holding. You do not miss out on returns simply because you could not afford a full share.

How Does GIFT City Enable Fractional Trading?

NSE IFSC and India INX, the two international exchanges at GIFT City, facilitate trading in US equities and other international instruments. Through broker-dealers registered at GIFT City, Indian residents (using the LRS route) and NRIs (through their GIFT City accounts) can access fractional investing in international stocks.

The process works broadly as follows:

  • You open a trading account with an IFSCA-regulated broker at GIFT City
  • Indian residents remit funds to their GIFT City account via LRS (up to USD 250,000 per year)
  • NRIs transfer their foreign currency earnings to the GIFT City account
  • You place buy orders for fractional shares of US or international stocks starting with just USD 5.
  • Your holdings, dividends, and returns are tracked and settled in US dollars

What Can You Buy Through Fractional Trading at GIFT City?

Through GIFT City platforms, investors can access:

  • US-listed equities, including high-value stocks that were previously out of reach for smaller investors
  • International ETFs tracking global indices, sectors, or themes
  • Depository receipts of global companies

The availability of specific fractional trading options depends on the platform and broker you use. Always check with your GIFT City broker regarding the specific instruments available for fractional investment.

Important Considerations

Fractional shares are excellent for accessibility and diversification, but there are a few practical points to keep in mind. First, not all brokers or platforms offer fractional trading; confirm this feature is available before opening your account. Second, dividends on fractional shares are paid proportionally, which may result in very small amounts on small holdings. Third, for tax purposes, gains from fractional share investments are treated in the same way as gains from full shares, so maintain proper records.

The Big Picture

Fractional trading is one of the most democratising developments in global investing. It removes the barrier of high share prices and makes global market participation accessible to virtually any investor, regardless of the size of their portfolio. GIFT City is India’s regulated gateway to this capability. You do not need to be a millionaire to own a piece of some of the world’s most successful companies.

Bonanza IFSC is a registered broker-dealer at GIFT City and can help you access international markets including fractional investing in US stocks. Reach out to us to learn more about how to get started.