SEBI has increased the maximum amount applicable for retail investors from Rs.1 Lakh to Rs.2 Lakh.
There are both positives & negatives of this move.
– It will increase the subscription amount in Retail Category with more investors using the ceiling amount of Rs.2 Lakh
– It will reduce the allocation of shares esp. to small investors who normally bid for 1 or 2 lots for amounts less than Rs.20,000/-
With proportional allotment more shares will be allotted to investors at the upper limits than the lower limit.
– Also in case of good issues since an investor is allowed to apply double the shares as before there is a high chance of over subscription going over the roof and ensuring lesser shares for investors with lower amount.
It will depend on how the allotment is done after the IPO in case of over subscriptions. Will SEBI also bring in a regulation for this? Considering SEBI & Mr.Bhave’s actions – we can expect a regulation soon – a sub-category within retail 🙂
Till that time, enjoy the enhanced limit in good IPOs