It's extremely important to know how a retail investor is defined when investing in an IPO. This is important because, retail investors are sometimes offered a discount in an IPO. For example the recent IPO of Shemaroo offered retail investors a price discount of 5 per cent in the IPO offer.
So how is a retail investor defined?
Therefore, to qualify as a retail investor you should invest a sum of Rs less than Rs 2 lakh, as you also get a discount in the IPO.
In case you desire to invest more than this sum, the ideal way would be to invest in your spouse or relative's name.
Until a few years ago a retail investor was defined as an investor investing less than Rs 1 lakh. However, that amount was considered very small and the new limit has been fixed at Rs 2 lakh and above.