Anthropic IPO: How Indians can invest in Claude-maker, and can Google parent Alphabet offer a backdoor entry?

For those unable to get an allotment, could buying Alphabet, Google’s parent and an investor in Anthropic, provide an alternative way to gain indirect exposure? How Indian investors can access foreign IPOs and why allotment is difficult Foreign IPO investing is not prohibited under RBI's LRS scheme, which permits remittances of up to US$ 250,000 per resident in a financial year. Resident Indians can invest in overseas securities under the LRS/OPI framework.

However, unlike India, the US IPO market has no fixed retail or foreign retail quota, and allocations are decided by the underwriters, with most shares typically going to institutional investors. "Indian investors can buy foreign IPOs through direct subscriptions, foreign brokers, institutional or private banking channels, or even through pre-IPO investments. The process requires eligible brokers or intermediaries and must comply with FEMA's Overseas Investment Rules, Regulations, RBI Master Directions and LRS limits," said Sanjit Singh Paul, smallcase manager and Managing Director, Modulor Global.

The classification as Overseas Portfolio Investment (OPI) or Overseas Direct Investment (ODI) is also important. Further, direct subscription channels may have country-specific restrictions that exclude Indian retail investors. "The actual experience of investing in IPOs in, say, the US is very different from India. Unlike India, where retail investors have a dedicated allocation category, around 90 percent of US IPO allocations have historically gone to institutions, although this varies across offerings.

Therefore, securing an IPO allocation is much more difficult for an Indian retail investor," said Paul. Therefore, the more practical way would be to buy shares on the listing day through an Indian app offering overseas investments or a foreign broker, at prevailing market prices. "For Indian retail investors, participating in a US IPO is not as straightforward as applying for an IPO in India. There is no equivalent domestic IPO allotment mechanism through which Indian residents can directly subscribe to US IPO shares.

As a result, the more practical route for most investors is to wait until the company lists on a US stock exchange," said Viram Shah, Founder & CEO, Vested. "Once Anthropic is publicly listed and available for trading, Indian investors can access its shares through global investing platforms. Investors can then buy shares through their international trading accounts, rather than seeking an allotment at the IPO price," added Shah.

Indirect way to invest in Anthropic There is also the possibility of indirect exposure. Alphabet has pledged up to $40 billion in funding for Anthropic, comprising an initial $10 billion cash investment and a further $30 billion to be disbursed subject to the AI startup meeting specified performance targets. "For instance, Alphabet, Google's parent company, has invested in Anthropic. An investor holding Alphabet shares therefore has some economic exposure to Anthropic through Alphabet's investment," explained Shah.

However, this is not the same as owning Anthropic shares directly. Alphabet's share price is influenced by its much larger business, and Anthropic represents only one part of its investment portfolio. What investors must understand The listing price also matters. A strong company is not necessarily a good investment at every valuation. Investors should study the company's financial disclosures, competitive position and long-term growth prospects before deciding how much exposure is appropriate.

"More importantly, investors should not make an investment decision based solely on the excitement surrounding an AI IPO. They need to understand how Anthropic generates revenue, whether its growth can translate into sustainable profitability, how much it spends on computing infrastructure and model development, and whether its valuation adequately reflects these costs and future risks," said Shah.