Motilal Oswal Q50 ETF Jumps 41% as Stocks Drop 2.6% — SkimNews
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- Motilal Oswal Nasdaq Q50 ETF price jumped 41% (from ₹141.99 to ₹199.89) between 4 and 10 September, even as the 50 stocks in its portfolio fell 2.6%, per Value Research.
- The ETF's premium to NAV escalated from 19.5% on 4 September to a peak of 83% on 9 September, settling at 72.8% on 10 September (NAV ₹115.69 vs price ₹199.89).
- India's overseas investment limit for ETFs was reached in April 2024, blocking creation of new units; the resulting demand-supply imbalance is driving market prices far above underlying value.
- Trading volume spiked to ₹43 crore on 9 September, roughly 30x the ETF's average daily volume of around ₹1.4 crore.
- A 7 September rule change shifted ETF price-band references from the prior NAV to the previous day's traded price, creating a feedback loop that let each session's higher close anchor the next day's ceiling.
- Motilal Oswal Mutual Fund estimated the Q50 could have closed at no more than ₹142.60 on 7 September and ₹142.48 on 8 September under the old framework; under the new one, ceilings were ₹170.32 and ₹196.91.
- Other India-listed international ETFs have also seen premiums above NAV due to the same unit-supply limits, with the gap varying by underlying asset and trading activity.
Why it matters: Indian retail investors chasing US tech exposure via this ETF are now paying roughly ₹200 for ₹115.69 worth of underlying Nasdaq stocks — a 73% markup. The combination of a frozen overseas investment limit (hit in April 2024) and the new price-band methodology has turned supply scarcity into a self-reinforcing price spiral, and other international ETFs face the same structural distortion.
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