SEBI nay change Retail Investor's Definition

Securities and Exchange Board of India

Image via Wikipedia

The Securities and Exchange Board of India (SEBI) is planning to enhance the maximum investment limit for retail individual investors in public issues from Rs 1,00,000 to Rs 2,00,000. In a discussion paper floated by the market regulator, SEBI has argued that “retail individual investors, who have the capacity and appetite to apply for securities worth above Rs 1,00,000 were constrained from doing so because of the Rs 1,00,000 limit.”

The discussion paper also contends that since 35 per cent of the public issue is to be allocated to retail investors, in case of large public issues – with issue size in the range of Rs 4,000-6,000 crore -- the limit of Rs 1,00,000 would mean that the issue has to receive a minimum of 1,50,000 to 2,00,000 applications from retail category. “This could be a daunting task considering that in case of well oversubscribed issues, the number of applications received from Retail Individual. Investors was in the range of 35,000 to 70,000,” it says.

It further observed that the rate of inflation in India has increased from about 4 per cent in 2005, when the Rs 1,00,000 limit was fixed, to about 12 per cent currently. In the same period, the BSE Sensex has risen from about 8,000 points to about 18,000 points, meaning that retail investors now buy a lesser number of securities with Rs 1,00,000 than they would buy with the same amount in 2005.

Prior to 2005, retail investors could apply for shares only up to Rs 50,000. Later, it was increased to Rs 1,00,000 in March 2005.

SEBI has sought comments/suggestions from public on the proposed changes on or before September 3, 2010.

Enhanced by Zemanta


Post a Comment

All comments are moderated. Please post no spam

Disclaimer & Privacy Policies

(c) Mrs. Ruby Christy. This site and contents are owned by Mrs. Ruby Christy;
Use of this website and/or services offered by us indicates your acceptance of our Disclaimer& Privacy Policies.

Information and opinions provided on this website ( has been independently obtained from sources believed to be reliable. However, such information may include inaccuracies, errors or omissions. and its affiliates, information providers or content providers and R.John Christy and his Family shall have no liability to you or third parties for the accuracy, completeness, timeliness or correct sequencing of information available on this website or feeds, or for any decision made or action taken by you in reliance upon such information, or for the delay or interruption of such information.,its affiliates, information providers ,content providers and R. John Christy and his Family shall have no liability for investment decisions or other actions taken or made by you based on the information provided on this website. Any action you choose to take in the markets is totally your own responsibility. and R. John Christy and his Family will not be liable for any, direct or indirect, consequential or incidental damages or loss arising out of the use of this information. This information is neither an offer to sell nor solicitation to buy any of the securities mentioned herein. Opinions expressed by R. John Christy are his own and not of his past, present and future employers.
The DoubleClick DART cookie is used by Google in the ads served on this websites displaying AdSense for content ads. When users visit this website and either view or click on an ad, a cookie may be dropped on that end user's browser.
  • Google, as a third party vendor, uses cookies to serve ads on this site.
  • Google's use of the DART cookie enables it to serve ads to your users based on their visit to this site and other sites on the Internet.
  • Users may opt out of the use of the DART cookie by visiting the Google ad and content network privacy policy.
  • never collects any personal information of visitors.