Knowledge Base

When you apply for an IPO, you’re placed into a specific investor category and each category has its own reserved portion of shares and its own allotment method. Knowing where you fit helps you set the right expectations.

Retail Individual Investors (RII)

If you’re applying for up to ₹2 lakh worth of shares in a single IPO, you’re a retail investor. This is the category most individual investors fall into. Retail investors get 35% of the shares in most mainboard IPOs. When an IPO is oversubscribed, allotment is done by lottery every valid application gets an equal shot, regardless of how many lots you applied for.

Non-Institutional Investors (NII) / HNIs

If you apply for more than ₹2 lakh, you move into the NII category. This segment gets 15% of the issue. It’s split into small NIIs (₹2 lakh to ₹10 lakh) with lottery-based allotment, and big NIIs (above ₹10 lakh) with proportionate allotment.

Qualified Institutional Buyers (QIB)

QIBs are large institutional investors – mutual funds, insurance companies, foreign portfolio investors, and banks. They get 75% of the issue in most IPOs, and allotment is proportionate. The more they apply for, the more they receive.