SEBI proposes to enhance retail investment limit to Rs. 2 lacs

One form of investment in the share market for retail investors is to participate in the Initial Public Offerings (IPOs) or Public Issues. The present limit for retail investors is Rs. 1 lakh. Securities and Exchange Board of India (SEBI), the market regulator for share markets, has today proposed to double the investment limit for retail investors to Rs 2 lakh in public issues. This move is aimed at greater participation by retail investors in primary issues.
SEBI has invited comments by September 3, 2010. The justification for the increase in the limit appears to be the increase in the inflation rate from 4% kin 2005 to 12% in 2010/ During the same period BSE sensex has also gone up from 8000 points to 18,000.
With many public issues in the pipeline, the increase in retailers prescribed limit from Rs 1 lacs to Rs 2 lacs enable aggregate participation by the retail investors.