SEBI - The Securities and Exchange Board of India proposed to have 2 different categories for high networth individuals (HNIs) in an initial public offering (IPO). The application will be splits in 2 categories like (1) 2 Lakh to 10 Lakh and (2) bids over 10 Lakh and more.
SEBI comes out with a discussion paper and asked public to share their suggestions by October 20. Currently if anyone who is applying more than 2 Lakh bid in IPO falls into HNI category. As these things looks like SEBI feels that the large IPO applications might create risk for the market that is why they proposed the changes.
Currently there are 3 categories in applying the IPO. Up to 2 lakh IPO bid falls into Retail portion with 35% of the IPO allocation. From 2 Lakh and above the IPO application falls into HNIs it has 15% of the IPO allocation while 3rd category of QIBs has 50% of the IPO allocation. After the above change we might see impact in the HNIs IPO application numbers but we are still waiting for the confirmation of SEBI.
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