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What is the difference between retail investor, Non-institutional bidders, Anchor Investor and Qualified Institutional Bidders (QIBs)?

Investors can apply for shares in one of the following categories:

  1. Retail Individual Investor (RII)

    • Resident Indian Individuals, NRIs and HUFs who apply for less than Rs 2 lakhs in an IPO falls under RII category.
    • Not less than 35% of the Offer is reserved for RII category.
    • NRI's or HUG's who apply with less than Rs 2,00,000 can apply in RII category.
    • Allotment Basis
      • If IPO doesn't get over subscribed in RII Category – Full allotment to all applicants.
      • If IPO is oversubscribed in this category – The allotment to each investor shall not be less than the minimum Bid Lot, subject to availability of Equity Shares in the Retail Portion. For example if the IPO subscribed 2 times in retail 1 out of 2 applicant will get 1  lot irrespective to how many shares they applied for.

        Say investor A applied for Rs 2 lakhs (15 lots), investor B applied for 1 lot and investor C applied for Rs 1 lakh (7 lots) in an IPO at cut-off price. If IPO subscribed 3 times in RII Category, the allotment will be done through lottery and only 1 of 3 applicants will get 1 lot allocated. It doesn't matter how many shares they have applied.

    • Retail and non-institutional bidders a re permitted to withdraw their bids until the day of allotment.
    • Note:
      • Always apply at cut-off price in this category.
      • If IPO oversubscribe, apply only 1 lot per IPO application.
      • To maximize the allotment, apply though multiple accounts on your family members name.
  2. Non-institutional bidders (NII)

    • Resident Indian individuals, Eligible NRIs, HUFs, companies, corporate bodies, scientific institutions, societies and trusts who apply for than Rs 2 lakhs of IPO shares falls under NII category.
    • NII need not to register with SEBI.
    • Not less than 15% of the Offer is reserved for NII category.
    • High Net-worth Individual (HNI) who applies for over Rs 2 Lakhs in an IPO falls under this category.
    • Allotment Basis – Proportionate. For example, if IPO is subscribed 100 times in NII category, investors who applied for 100 shares will get 1 share.
    • NII quota get very high over-subscription as its size is small and many individual investors take IPO Funding to apply in this category. Many of these investors apply for 100's of crore rupees worth of shares under this category.
    • Non-institutional bidders are permitted to withdraw their bids until the day of allotment.
  3. Qualified Institutional Bidders (QIB's)

    • Public financial institutions, commercial banks, mutual funds and Foreign Portfolio Investors ect can apply in QIB category. SEBI registration is required for institutions to apply under this category.
    • 50% of the Offer Size is reserved for QIB's
    • Allotment Basis – Proportionate.
    • QIBs are mostly representatives of small investors who invest through mutual funds, ULIP schemes of insurance companies and pension schemes.
    • QIB's are prohibited by SEBI guidelines to withdraw their bids after the close of the IPOs.
  4. Anchor Investor

    • An anchor investor in a public issue refers to a qualified institutional buyer (QIB) making an application for a value of Rs 10 crore or more through the book-building process. An anchor investor can attract investors to public offers before they hit the market to boost their confidence.
    • Up to 60% of the QIB Category can be allocated to Anchor Investors;
    • Anchor Investor Offer Price is decided separately.
    • Anchor investor's has different Anchor Investor Bid/Offer Period.
    • The minimum application size for each anchor investor should be Rs 10 crore. No merchant banker, promoter or their relatives can apply for shares under the anchor investor category. In offers of size less than Rs 250 crore, there can be a maximum of 15 anchor investors, but in those over Rs 250 crore, SEBI recently removed the cap on number of anchor investors.
answered on

User Comment

avatar
26. Jegan  Jul 27, 2018 07:37 Reply
I had applied for HDFC AMC ipo,for 182 shares which comes to 200200/- will it be treated under hni category or the individual category.If I'm going to get considered for hni,where should I represent that I'm not a hni to HDFC AMC or SEBI
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25. lrus  Dec 15, 2017 10:19 Reply
Is HNI allotment made from the NII category with 15% reservation?

Can one apply under two different categories: RII ( < Rs 2lac) and NOH/NII: Rs > 2lac?
If not, Should NRI use RII or NOH/NII category for application?
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24. Nitin Agrawal  Nov 30, 2017 13:09 Reply
Can i apply in retail category for 4000 Shares (2 lots of 2000 Shares each) @ Rs 57 ?

As i know Retail can apply max of Rs 200000 but in my case applying 2 lots of 2000 Shares i.e. 4000 Shares @ 57 = Rs 228000
Is it will be a valid application ?
If not does i need to apply for 1 lot of 2000 Shares only ? Kindly Guide

Very thanks in advance for the suggestion and help
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23. anonymous  Nov 14, 2017 15:45 Reply
How different is QIB from anchor investor? As article says anchor investors are actually Qualified Institutional buyers having 30% quota from 50%.
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22. Desi Wolf  Oct 9, 2017 13:13 Reply
A few fundamental queries about NII application:
1. Can a retail investor (meaning not super rich) apply under NII quota, or is there certain eligibility?
2. What are the pros and cons of applying in NII quota? Are there more chances of allotment?

Thanks in advance.
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22.1. SMcareer  Nov 6, 2017 11:25
Ans-1 No RII can apply as HNI.

Ans-2 NII didn`t get any discount in case promotors are giving the discount to RII. But the pros is that you can apply for more than 2 lakh amount.
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21. Kk  Oct 6, 2017 20:34 Reply
I think that operator''s only subscribe the RII portion(35% whoppingly forced by law) through their relatives to ensure listing gains only for themselves.
Why shud they allow others to earn?
If they are not going to give listing gains, then they allot to general public..to grant the listing loss.
So it''s better to invest as a NII.15% category.
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20. Naresh Jariwala  Jul 21, 2016 21:50 Reply
How much possibility of allotment for IPO in HNI against RII?
What is the best option to getting the chance for allotment especially while more subscribed?
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19. Vijay  May 21, 2017 21:30 Reply
HUDCO issued 204,058,747 shares in IPO.

NSE volume on listing day 21 crore & delivery is 42.5% means approximately 9 crores shares bought for delivery.

BSE volume on listing day 3 crore & delivery is 35% means approximately 1 crores shares bought for delivery.

Therefore Total 10 crore shares bought for delivery on listing day which is nothing but 50% of the total issue size.

In a book built issue allocation to Retail Individual Investors (RIIs), Non Institutional Investors (NIIs) and Qualified Institutional Buyers (QIBs) is in the ratio of 35:15: 50 respectively.

Meaning all retail & HNI Allotment is absorbed on listing day ?
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18. DADA  Oct 18, 2016 22:56 Reply
Can HIN, NII, QIB ''s are eligible for INTRADAY trade ???
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17. Kunjal  Sep 23, 2016 11:28 Reply
Can one person apply ipo in retail category as well as NII category at same time.
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16. Sandeep H S  Sep 19, 2016 14:25 Reply
Is is possible for individual to apply for both retail ( below 2 lakh ) and HNI ( above 2 lakhs)
for a IPO ?
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15. sha Nathmal  Jul 23, 2016 18:12 Reply
Is it possible for HUF to participate in IPO.If yes then what is the procedure for below 2 lakhs.
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14. Srinivas  Jul 23, 2016 12:40 Reply
How can a retail investors withdraw their bids before the date of allotment
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13. amin  Jun 26, 2016 12:20 Reply
what is the chances of allotment in IPO of RBL and what is expectation price of listing if some body bids with 25 crore in HNI category ?
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12. kamlesh gilitwala  May 7, 2016 10:41 Reply
how do i apply in qib quata?which brokers or institutes can help me in apply in qib quata?
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11. patel rameshbhai Chunilal  Feb 11, 2016 11:01 Reply
IF I HAVE JOINT DEMATE ACCOUNTIN THE NAME OF A & B. FURTHER OTHER INDIVIDUAL ACCOUNT IN THE NAME OF A AND B NAME RESPECTALY. CAN I APPLIED IN IPO IN THE NAME OF (1) A & B, (2) A & (3) B
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10. Patel Rameshbhai Chunilal  Feb 11, 2016 10:49 Reply
I am registered as retail investor.in bank ASBA.
How I can apply for IPO more than 2lakhs.
Have I to register again or what documentation needed for applying as HNI
After closing ipo can i withdraw my application.till what period
avatar
9. Keshar  Jan 18, 2016 19:27 Reply
I am registered as retail investor.in bank ASBA.
How I can apply for IPO more than 2lakhs.
Have I to register again or what documentation needed for applying as HNI
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8. sathya  Mar 6, 2012 06:55 Reply
can u state what is Non retail individuals? their role
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7. Rahul  Dec 15, 2011 21:46 Reply
Thanks for this info.
But i want to know why companies are providing one extra day to retail investors for applying in ipo. (Please provide us with any cos. red heiring prospectus for proof)

Thanks & Regards,
Rahul.
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6. s.govardhan  Oct 20, 2011 13:11 Reply
well explained. and also need in the way of how securities are traded in stock exchange? (Briefly i need some power presentation, )
avatar
5. Dhinakar  Nov 27, 2010 00:41 Reply
Good definition. I was wondering if there is any difference in pricing between RII and HNI/Non Institutional bidders. May be the Non institutional investors will not get the discount offered for RII.
avatar
4. mahesh  Nov 10, 2010 11:45 Reply
but i am of doubt in %age allocation to retailer bidders
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3. Prajith  Oct 1, 2010 12:03 Reply
Sir,

But in SEBI regulations it is mentioned as
QIB- 50% of net offer to public.,
35% of net offer to public to RII,
15 % of net offer to public to Non Instutional Investors.
Wat is this net offer to public mean then ?
avatar
2. ravi c  May 20, 2008 16:38 Reply
what is the difference between NHI and NII
avatar
1. Gangadhar Reddy  Nov 6, 2007 10:06 Reply
Excellent answer. Indeed I'm looking for this information for more then 6 months. At last I could able to find it out with this.

Very impressive...

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