SEBI may double HNI threshold to R10 lakh
The definition of a high-net worth individual (HNI) in the domain of investing could change soon with markets regulator SEBI mulling an increase in the minimum investment required for an investor to qualify as an HNI.business Updated: Sep 26, 2010 20:19 IST
The definition of a high-net worth individual (HNI) in the domain of investing could change soon with markets regulator SEBI mulling an increase in the minimum investment required for an investor to qualify as an HNI.
Currently, HNIs are defined as those putting in a minimum of R5 lakh for investment purposes with portfolio managers and venture capital funds. SEBI is now considering raising this benchmark to a minimum of R10 lakh, sources close to the development said.
In the primary market or public offers such as IPOs, investors putting in anything in excess of R1 lakh in a single offer are currently counted as HNIs, while those investing up to R1 lakh are termed retail investors.
SEBI has already proposed to raise the ceiling for retail investors to R2 lakh in public issues, pursuant to which only those investors putting in more than R2 lakh would be considered as HNIs.
The regulator has received positive feedback on this proposal and might soon revise its regulations to allow retail investors to invest up to R2 lakh in public issues, sources said.
Encouraged by the response to the higher benchmark for retail investors and HNIs in public issues, the regulator is now mulling over raising the bar for HNIs in other segments, such as portfolio management and venture capital funds, sources said.
The move follows a sea-change in the profiles of investors hitting the market in terms of their income levels as well as growing risk appetite, experts said.