What is GIFT NIFTY ? Benefits of trading GIFT NIFTY | CA Rachana Ranade

यह पूक सी एर राचना ती है। & just in case if you are wondering as to how was i able to say this to you. पूक सी एर चना ती है। & just in case if you are wondering as to how was i able to say this to you. पूक सी एर चना ती है। पूक सी एर राचना ती है। & just in case if you are wondering as to how was i able to predict the market opening so precisely. You might have guessed it right. It was not related to my experience. It was related to something else & what was that? It is nothing but gift-lifty. Now I am sure you would want to know more about gift-lifty & that is the reason why in today's video. We are going to focus on three key points. Number one, what is gift-lifty? Number two, we will try and understand the difference between nifty & gift-lifty & very very important. Number three, we are going to understand as to what could be the benefits to NRI's if they invest through the gift-iFC. Now if you want to understand the concept of gift-lifty, first things first you will have to understand what is the concept of gift-city. Then you will have to understand what is iFC & then you will be able to appreciate the concept of gift-lifty. First things first, what is gift-city? It is Gujarat International Financial Tech City. That is gift-city. So what is it? It is a physical city. It is located near Ahmedabad. So you can see that on Google Maps right now. That is where it is actually located. It is physically located there. Now what is iFC? iFC is nothing but a regulatory framework which is the full form of it is International Financial Services Center. So it is a regulatory framework within gift-city. So what will be the nature of gift-city? As I mentioned, it is a location based product. It is actually located in Gujarat, near Ahmedabad. What is iFC? It is a concept. It is a regulatory framework within gift-city. Now just to give you a quick, simple example for you to have a better clarity. So as I told you, gift-city is a physical location. Now what all things could be there inside the gift-city? Could there be good infrastructure projects inside the gift-city? Could there be residential area inside the gift-city? Could there be IT parks inside the gift-city? Could there be financial services or financial hubs inside the gift-city? Yes. Okay. But then, okay, I understood that there are residential parks, there are infrastructure projects, there are financial hubs. Now, for those financial hubs now, they have made a framework. So that the financial reason I will tell you afterwards, so that you will keep on watching the video till the end. Now you are understanding for that financial hub. So for example, I am going to tell you right now that we have BSC and NAC. We have Bombay Stock Exchange and National Stock Exchange, both located in Bombay. But do you know that BSC has a fully owned subsidiary, which is located in gift-city. NAC also has a fully owned subsidiary, which is located in gift-city. And that is nothing but so BSC and NAC have their own versions of exchanges in gift-city. The names of these companies for BSC, it is India INX. Okay, so that is the Bombay Stock Exchange version of gift-city. Okay, so one more stock exchange in India, but located inside the gift-city. For NAC, it is NAC IX, National Stock Exchange, International Exchange. So both these stock exchange have BSC and NAC both have their versions of gift-city. And by the way, these exchanges are nothing but fully owned subsidiaries of the main exchanges. I am just simply telling you, okay, now you only tell me what framework will apply to them. Will it be only CBI framework or will it be CBI framework plus IFS regulatory framework? It will be both for those who are located inside the gift-city. Okay, I hope this is clear. Now, last part, very important part. Like you have Sensex for BSC and like you have Nifty for NAC. Now those two exchanges in gift-city will have their own indices. So for example, if I am talking about India INX, which is like the equivalent of BSC. They have an index, which is tradable on the exchange, which is called as India 50, which is like a replacement for Sensex. And similarly, for NAC IX, it will be gift-nifty, which will be like parallel for Nifty. So I hope you have understood, gift-nifty is nothing but an index of what NAC IX. What is NAC IX? It is the version of NAC inside the gift-city. What is gift-city? It's a location. It's a physical city inside Gujarat. What framework, what are the regulatory framework applicable to such financial, companies, financial hubs located in IFC. Located in gift-city, it is IFC. If you have understood this, then you will be like, "I have understood whatever you have told till now." But there is to be something called as SGX-Nifty. What happened to that? SGX-Nifty was nothing but the derivative, which was a tradable derivative of our Nifty 50. But it's which used to trade on the Singapore Exchange, okay? So, Singapore Exchange, which is SGX, on that our Nifty 50 derivative contract used to be traded. Now that same SGX contract, now has stopped trading there and has started trading in gift-city on the NAC IX platform. And that is nothing but gift-nifty. So in simple words, gift-nifty is a replacement for SGX-Nifty. Now that you know so much about gift-city, about IFC, about the BSE-NHC origins inside gift-city, now let's understand what's the difference, exact difference between gift-nifty and Nifty. Now let's understand the difference. First, we'll talk about Nifty and then in the second column, we'll talk about gift-nifty, okay? Trading venue, where will Nifty contract be traded? Tell me. Of course, it will be traded on NAC India. But if I'm talking about gift-nifty, it will be traded on NAC IX, which is located in, you know it. In gift-city, right? Second point, which is about the underlying asset, okay? Now what will be the underlying asset for both Nifty or GIF-Nifty is going to be exactly the same. It's not a point of difference, it's a point of commonality. For both BIT-Nifty or GIF-Nifty, what is the underlying? It is Nifty 50 index. Simple deal here. Now comes an extremely important point. In which currency will the contract be settled? For Nifty, currency will be INR. So, derivative contracts of Nifty will be settled in Indian rupees. But for GIF-Nifty, they are going to be settled in US dollars, okay? Now, acha, something, dimak ke pati jalge. Now, people are cha in US dollars. So, is it why it is mainly targeted towards non-resident Indians? You are now starting to get a clue, okay? Because that is going to be the third part of our entire video, okay? So, important point, keep this in mind. That GIF-Nifty contracts are going to be settled in US dollars. Now, who will be the participants? For Nifty, it will be primarily domestic investors and NRIs, okay? But with limits. But if I am talking about GIF-Nifty, it is primarily going to be foreign investors. It is designed for them, correct? Who is going to be the regulator? I did talk about it for Nifty, for NSC, BSE, whatever. It is going to be SEBI, for GIF-Nifty. It is going to be SEBI, but which additional regulations will apply? Now, you know it. It is going to be IFSC regulations as well, correct? Now, here comes an important point. For Nifty, it is going to be regular marketers, everyone knows about it. You can see the marketers on screen as well at 950-330. And for GIF-Nifty, you will see the marketers. Oh, I mean, how much is that? That's almost 21 hours. Now, if you can correlate with what happened in the beginning of the video. If you remember, I was able to guess it very clearly. That today, market will open as a gap down. Today, market will open as a gap up. How? Because GIF-Nifty was already trading at that time. And finally, what is GIF-Nifty? What is the underlying asset for GIF-Nifty? Underlying is nothing but Nifty. So if GIF-Nifty is trading, let's say, 100 points up, GIF-Nifty will not go 200 points down. I mean, Nifty will not go 200 points down, right? It has to be very much in sync with GIF-Nifty. So I hope now you are able to correlate with what happened in the beginning of the video, right? Well, now that you have understood so many things, and now that you have understood at all, this is primarily for foreign investors. And if you have NRI friends and they are very interested to invest in India, they should be very much aware about what could be the benefits that they will get if they invest through GIF-IFSC. Now, before we talk about the benefits which can be available for NRIs, before that, I think, you know, we as researchers, we as students of stock market, we should always try and go into the wise. So when I was researching for this, I was like, why is this GIF-City? I mean, why was this GIF-City even required? So when I started reading about this, I came across a very interesting point over here. So let's assume that there is a mutual fund house, okay. Nam India, which is Nippon Life Insurance Asset Management Company, okay. So let's say, Nippon, so I'm just going to say Nippon, okay. Nippon wanted to set up its ETF. Can they very easily set up its ETF-ES? Can they allow the investors to trade in ETF units on the Bombay Stock Exchange, on the National Stock Exchange? Yes, there's no problem. But now, imagine that they wanted to attract NRIs to invest in their ETFs. Was it possible? Or maybe yes, but then for NRIs, the headache was that, they had to first convert their dollars into rupees, then invest. When they wanted to sell, then again, the proceeds will have to be converted from rupees to dollars. And the big point of exchange rate risk is to come into play, correct? So now, if they were to come up with an ETF, let's say, Nifty 50 ETF. So Nippon wanted to come up with Nifty 50 ETF. And if they wanted to price it in US dollars, was that allowed or here? Answer is no. Then what these companies used to do? They then would register their fund, maybe in Singapore, maybe in Dubai, maybe in Luxembourg. These are like financial hubs outside India, okay. So you can imagine our mutual fund, but has to register outside India, because they want to price it in dollars, okay. Now, what happens with this? Whatever money is collected, whatever gains the fund generates, they'll pay taxes outside India, regulator, their regulator will earn the fees. If I'm talking about laws, the foreign laws will be applicable. If I'm talking about job opportunities, it will be created outside India. Now, to just think about all these things that instead of our mutual funds investing, I mean, setting up their mutual fund houses abroad to attract foreign investors, why not make a special city in which special laws will be applicable, okay. That is the reason why gift city was actually incorporated, where IFS regulations also apply. If so, why did I give example of Nippon? By the way, in May 2023, Nippon live India asset management, that is now India, became the first Indian mutual fund company to set up an offshore fund in gift IFSC. And what did they launch? They launched Nippon India ETF, Nifty 50, IFSC. And this ETF was denominated in US dollars, okay. So, now that you have understood the primary reason, primary reason number one, can they open, can they start, can they come up with an ETF, which is denominated in dollars, answer is yes. Now, what is the benefit to NRIs? The biggest benefit to NRIs is they get the exposure to Nifty stocks, but without the currency fluctuation risk, okay. So, I hope this first and foremost, very important point is very clear. And of course, in this entire process, don't you think India will earn that credibility as a global financial hub as well? Answer is absolutely yes, right. Now, what could be one more benefit? I actually told about it, but just to quickly reiterate the fact, is there a lot of regular regulatory flexibility? Absolutely yes. The rules are lighter inside the gift city. It is, they are made in such a way that the entry of foreign investors will be made much, much easier. So, we have regulatory flexibility for that. So, if you remember, when I told you, when I told you in the first section, what is IFC, what is this regulatory framework? You remember that this is the regulatory framework, which easily allows foreign capital inside India and they can invest in India with comparatively lower rules and regulations, okay. And the final one is about the tax benefits. Now, if I were to understand that tax benefits, let me quickly show you the website that I referred to. Why would I want to show that? Because, you know, I am not a practicing chartered accountant and I don't practice an international taxation at all. I mean, anyways, I'm not a practicing chartered accountant. My knowledgeable international tax is not that great. But I have referred to this gift Gujarat.ion website. And if you see here, you can see loads of tax exemption related thing. You can see an incentive, tax incentives. That says you have an income tax exemption. It also talks about interest exemption. It talks about capital gain tax exemption. Wow, bathroom. So, I'm going to give you the link of this same website in the pinned comment in the description box as well. But to, you know, additionally cross check, what I did was apart from that website I referred to, I also had a word with few of my chartered accountant friends, some acquaintances who practice an international tax. According to them as well, whatever capital gain tax, whatever capital gains arise because of sale of ETFs or mutual funds. They are exempt under these sections. Even if they have a derivative related income, this will also be exempt. So, all in all, have they made maximum efforts? Do you know encourage investments and gift city answers? Obviously, yes. Now, if you feel that I'm a guy, what about us? Why don't we get exemptions? For investors are going to bring in dollars in India. So, don't deserve some special treatment. And that is the reason why a lot of tax exemptions are given. I hope you found a lot of value on a totally different topic today. And I'll be really honest. I had not thought about this topic. It was you all who requested me to do a video on gift nifty. And if you feel that I should be doing videos on some other topics, please give me your suggestions, your firmeish in the comment section. And I'll be more than happy to make videos on such different topics as well. If you like the video, please don't forget to smash the like button. Please don't forget to share this video with your friends. I'll see you in the next one. Till then take care. Chaim and bye-bye. rachinaranadi.com & rachinaranadi.in