Paper Title/ Authors Name Download View

After the Liberalization, Privatization and Globalization (LPG), beginning from the early 1990s, The
Government of India has initiated several reforms to regulate and develop the markets and to ensure
adequate protection for the Indian investor. With this end in view, the Securities and Exchange Board of
India (SEBI) set up in 1988 was strengthened. Permitting of FIIs, global mutual funds and merchant
bankers poured in new dynamism and vitality into the markets. Further, several steps were taken to
promote the primary markets and streamline the secondary market operations. Most importantly, the
National Stock Exchange, a state-of-the art technology driven new stock exchange and central
depositories, the NSDL and the CDSL were established. This entire path breaking initiatives together with
abolition of taxation on dividend, reduction of long term capital gains tax and allotment of quota in IPO
for small investors have begun to attract the Indian investors to the capital markets in droves and the
number of retail investors had increased multi-fold in the post-reforms era. A SEBI/NCAER study
revealed that by the year 2000-01, 21 million individual investors had invested in equity/debentures.
As per SEBI definition, a retail investor is one who finances a listed company in the form of equity
(shareholder) or debt (debenture holder) upto Rupees one lakh through an IPO.