CII for hike in value limits for retail investor

New Delhi, Sept 3: Increasing the share application amount limit of the retail investors from Rs 1,00,000 to Rs 10,00,000 will give a greater leeway for retail participation, an industry expert said here today.

Commenting on the recent over subscription of the retail portion to lesser extent compared to the over subscription from the High Net worth Individual (HNI) quota leading to multiple applications from investors, CII-Capital Market Committee Chairman Nimesh Kampani said a feasible solution to alleviate the practice of multiple applications under the retail quota would be to increase the value limits of the retail investors.

He also said that having a retail quota in IPO issues is necessary to avoid unequal distribution of wealth and will help with equity in wealth creation.

CII called for a restructured quota system for the IPO process, under which 35 per cent applications worth Rs 10 lakh and below would be kept for individual applicants and 10 per cent for applications worth Rs 10 lakh and above.

While a 10 per cent quota has been proposed by the Chamber for applications from corporates. The remaining 45 per cent should be reserved for Qualified Institutional Buyers (QIBs) of which 5 per cent should be kept for Mutual Funds, the Chamber said.

Mr Kampani observed that retail investors have participated in large numbers in the recent IPOs issued. With growing incomes, he said, it was the right time to redefine the term retail investor and increase the value limits used to define the retail investor.

This would definitely help in bringing back the retail investors in the primary markets, he added.

UNI