Retail Investors in Indian IPOs: The Context

Abstract

The growing importance of emerging markets in the world economy is well acknowledged. Capital markets in these emerging economies are considered as key contributors in their growth story. These markets are constantly evolving with regulations, policy initiatives and legislative reforms shaping their growth. It is well accepted that a strong legal framework becomes the backbone for a healthy capital market, characterized by wider participation from a cross section of investors. One of the segments of the capital market is the market for initial public offerings. This chapter sets the context to the larger study undertaken on the theme of retail investor protection and participation in the context of initial public offerings in India. The study provides a narrative on the market developments that have been implemented by the regulator for improving the market of the public offerings from their rudimentary form in the 1990s to their present structure. This chapter familiarizes the readers about the contents in each of the chapters of the book. It explains the profile of a retail investor in general and in the context of IPOs. It also provides an overview of various anomalies that the markets for IPOs in India have suffered from, necessitating reforms in the market.