In order to boost retail investors in capital market, SEBI is introducing two measures Safety Net for IPO and Rajiv Gandhi Equity Scheme (may include Mutual Funds).
Safety Net for IPO
Draft proposal says that if a retail investor invests less than or equal to Rs 50000 in an IPO and if the price of the shares comes down below 20% from the market fluctuation then investor may return his shares to company. Company launching IPO will need to keep reserves so that it can reimburse maximum 5% of its launched shares. Benchmark for market fluctuation will be BSE 500 or S&P CNX 500. Refer to Economic Times Article for details.
Rajiv Gandhi Equity Scheme
If a retail investor whose taxable income is less than or equal to 10 lac per annum and entering first time in share market or in mutual funds then he can claim 50% of the invested amount (upto maximum of Rs 50000) in tax deductions. Investments made in top 100 listed stocks and PSU (Navratnas, Maharatnas, Miniratnas) will be eligible for this scheme. Lock-in period for this investment is 3 years. Refer to Business Standard Article or Financial Health meter for more details.
I believe government is getting serious in kick starting the stagnant economy. Let’s see what bigger measures it can take to increase income, curb expenditure and towards better governance.