Tuesday, October 26, 2010

Good News for Stock Market Investors

The title sounds interesting and in-fact the news that am gonna elaborate in this article
is good news for all of us.

As you may already know, we are all Retail Investors – the individuals who trade in
the Indian stock market with our personal DEMAT accounts. We are individuals who
invest small amounts of money in the stock market and trade in stocks.

Yesterday, SEBI has hiked the limit allowable for retail investors in IPO’ s and FPO’ s
for subscription. What was earlier 1 lakh has been hiked to 2 lakhs.

Let me explain with an example:


Let us take the case of the magnificent Coal India IPO that was available last week. In
my article on Coal India IPO I had mentioned that the maximum number of shares available for
retail investors (per person) is 425 – 400 (depending upon the price) this is because
the limit for retail investors was 1 lakh.

Assuming this news had come a week before, it would have been:

Maximum shares available for retail investors (per person) is: 850 – 800.

This indeed is very good news for retail investors who can spare upto 2 lakhs for an
IPO or a FPO.

Happy Investing!!!

Terms/Abbreviations Used in this Article:

SEBI – Securities and Exchanges Board of India
IPO – Initial Public Offering
FPO – Further Public Offering
DEMAT – Dematerialized Account, An account used for share trading. .

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