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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

25. lrus  Dec 15, 2017 10:19:19 AM IST 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?
24. Nitin Agrawal  Nov 30, 2017 1:09:00 PM IST 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
23. anonymous  Nov 14, 2017 3:45:57 PM IST Reply
How different is QIB from anchor investor? As article says anchor investors are actually Qualified Institutional buyers having 30% quota from 50%.
22. Desi Wolf  Oct 9, 2017 1:13:34 PM IST 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.
22.1. SMcareer  Nov 6, 2017 11:25:49 AM IST
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.
21. Kk  Oct 6, 2017 8:34:47 PM IST 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 grant the listing loss.
So it''s better to invest as a NII.15% category.
20. Naresh Jariwala  Jul 21, 2016 9:50:33 PM IST 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?
19. Vijay  May 21, 2017 9:30:14 PM IST 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 ?
18. DADA  Oct 18, 2016 10:56:35 PM IST Reply
Can HIN, NII, QIB ''s are eligible for INTRADAY trade ???
17. Kunjal  Sep 23, 2016 11:28:17 AM IST Reply
Can one person apply ipo in retail category as well as NII category at same time.
16. Sandeep H S  Sep 19, 2016 2:25:44 PM IST Reply
Is is possible for individual to apply for both retail ( below 2 lakh ) and HNI ( above 2 lakhs)
for a IPO ?
15. sha Nathmal  Jul 23, 2016 6:12:25 PM IST Reply
Is it possible for HUF to participate in IPO.If yes then what is the procedure for below 2 lakhs.
14. Srinivas  Jul 23, 2016 12:40:17 PM IST Reply
How can a retail investors withdraw their bids before the date of allotment
13. amin  Jun 26, 2016 12:20:51 PM IST 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 ?
12. kamlesh gilitwala  May 7, 2016 10:41:16 AM IST Reply
how do i apply in qib quata?which brokers or institutes can help me in apply in qib quata?
11. patel rameshbhai Chunilal  Feb 11, 2016 11:01:17 AM IST Reply
10. Patel Rameshbhai Chunilal  Feb 11, 2016 10:49:50 AM IST Reply
I am registered as retail 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
9. Keshar  Jan 18, 2016 7:27:38 PM IST Reply
I am registered as retail bank ASBA.
How I can apply for IPO more than 2lakhs.
Have I to register again or what documentation needed for applying as HNI
8. sathya  Mar 6, 2012 6:55:21 AM IST Reply
can u state what is Non retail individuals? their role
7. Rahul  Dec 15, 2011 9:46:20 PM IST 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,
6. s.govardhan  Oct 20, 2011 1:11:32 PM IST Reply
well explained. and also need in the way of how securities are traded in stock exchange? (Briefly i need some power presentation, )
5. Dhinakar  Nov 27, 2010 12:41:39 AM IST 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.
4. mahesh  Nov 10, 2010 11:45:45 AM IST Reply
but i am of doubt in %age allocation to retailer bidders
3. Prajith  Oct 1, 2010 12:03:24 PM IST Reply

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 ?
2. ravi c  May 20, 2008 4:38:07 PM IST Reply
what is the difference between NHI and NII
1. Gangadhar Reddy  Nov 6, 2007 10:06:56 AM IST 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...

More IPO Basics Questions...

List of all questions List of all IPO Basics questions Ask your question

  1. What is an IPO?
  2. Who decides the Price Band?
  3. Who decides the date of the issue?
  4. What is the role of registrar of an IPO?
  5. What is the role of Lead Managers in an IPO?
  6. What is Follow on public offering or FPO?
  7. What is primary & secondary market?
  8. What is the life cycle of an IPO prospectus?
  9. What is the life cycle of an IPO?
  10. What is the difference between Book Building Issue and Fixed Price Issue?
  11. What is the difference between Floor Price and Cut-Off Price for a Book Building Issue?
  12. What is the difference between retail investor, Non-institutional bidders, Anchor Investor and Qualified Institutional Bidders (QIBs)?
  13. As a retail investor I want to apply more then Rs 1 lakhs in an IPO. Can I invest in Non-institutional bidder's category? If yes then what are advantages or disadvantages of this?
  14. Is it mandatory to have PAN number to apply in an IPO?
  15. How many days is the issue open?
  16. What information should I keep after I submit the IPO application form?
  17. What is 'Market Lot Size' and 'Minimum Order Quantity' for an IPO?
  18. Does applying in an IPO guarantee me to get certain amount of shares?
  19. Investing in IPO's is much less riskier then directly investing in stock market. Is that true?
  20. Can I apply in an IPO through multiple applications on same name?
  21. How many days is the issue open?
  22. What is Basis of Allocation or Basis of Allotment?
  23. Can I revise or cancel my IPO application?
  24. Where do I get an IPO application form?
  25. Can a minor apply in IPO?
  26. Tips to choose right IPO for investment.
  27. Can a person apply in the non-institutional bidder category of an IPO?
  28. What is the minimum & maximum investment one could do in HNI category?
  29. Can I place a buy order during after hour session before the listing date of an IPO?
  30. How one can apply in IPO's online?
  31. How is IPO listing price decided?
  32. What is right issue or RI?
  33. Why does the retail Individual Investor RII bidding status is not getting updated every hour?
  34. What are the risk factors involve in applying in an IPO?
  35. Can both the joint demat account holders individually apply for an IPO?
  36. Why does maximum subscription Amount for Retail Investor is limited to Rs 2 lakh?
  37. What are the determining factors for the selection of an ipo to invest?
  38. How much tax I have to pay on returns (capital gains) for a particular IPO?
  39. What is the procedure to withdraw from an IPO?
  40. How a Company gets listed on stock exchange without an IPO?
  41. For how many days an issue is required to be kept open?
  42. Can minors apply to an ipo ?
  43. What is over the counter trading ?
  44. Can we sell the stock allotted to us in a ipo before the stock gets listed ?
  45. How to fill IPO online ?
  46. What will be the category of 'private family trust' for applying in IPO ?
  47. What will be the category of 'private family trust' for applying in IPO ? Retail Bidder or Non-Institutional Bidder ?
  48. Can private limited company eligible to subscribe in non institutional category?
  49. What do you mean by pre IPO placement? Is it worth to buy any script at the time of pre IPO placement and how will it benefit the customers ?
  50. Who can apply for QIBs in IPO? WHAT is the rules and regulatin for QIBs ?
  51. How many days issue takes to list in the market ?
  52. What is call option and put option?
  53. What is the listing of ipo and how the listing done ?
  54. How many days does it take for a cheque to be cleared for an application of an IPO?
  55. How cut off price of IPO decided?
  56. What is meaning of BID QUANTITY & BID PRICE ?
  57. What is the full form of IPO ?
  58. What do you mean by IPO funding ?
  59. Can I cancel application made through 'Self Certified Syndicate Bank' ? How many ways are there for doing so?
  60. What is the role of 'Syndicate Members' in IPO Processing?
  61. What are the timelines for Book Building IPOs in India?
  62. When maximum number of days for which IPO bid should remain open is 7 (and minimum is 3), why companies go for less than 7 days bidding (i.e. 3, 4 days generally)?
  63. How to apply more than one application in an IPO?
  64. How many IPO applications can be made from one bank account using ASBA?
  65. What are different ways of filing IPO application?
  66. How many IPO applications can submit through online net banking from one bank account?
  67. Can I apply in an IPO from my current bank account?
  68. Can one apply an IPO from sweep in/out saving bank account?
  69. Can I apply IPO in the name of family members & friends from my saving bank account?
  70. Can I apply more than one IPO application in my name from different saving bank accounts in the same bank or different banks?
  71. What fields make an IPO application unique?
  72. If I have joint DP account whom I should consider for applicant in an IPO application form?
  73. Can I apply an IPO application in the name of Minor or HUF?
  74. How many lots in an IPO should I apply to get maximum allocation in retail category?
  75. I had applied full lots (Rs. 2 lakh) in an IPO but was not allotted any shares. Can changing the brosker, bank account or applying 1st day 1st hour etc. improve my chances?
  76. When should I expect allotment of IPO shares?
  77. When should I expect credit of IPO Shares in my Demat Account?
  78. When should I expect release of funds blocked for IPO in my bank?
  79. When should I expect listing of IPO shares?
  80. Till what time I can apply in an IPO on last day of an IPO?
  81. Should I submit three bids of one lot each at three different bid prices in one IPO application?
  82. If there is a discount to retail investors in an IPO, at what price should I subscribe?
  83. I have not marked cut-off but has given bid price at upper band in an IPO application. Does it make any difference?
  84. Why should I bid at cut-off in a book building IPO?
  85. I applied in an IPO whose price band is now reduced. I have already applied in original band & amount stands blocked already. What should I do?
  86. Where can I find the subscription figure of an IPO?
  87. How IPO shares price is discovered in early price discovery session?
  88. How one can apply in IPO's offline?
  89. How i can apply for an IPO online while my broker is not offering IPO facility but i have a demat account.
  90. Is it possible for individual to apply for both retail (below 2 lakh) and HNI (above 2 lakhs) for a IPO?
  91. Is there any eligibility criteria for NII or just minimum investment of Rs 2 lakh is required?
  92. Can I apply for an IPO for my friend’s PAN details in my Demat account?
  93. Is there different application form for NII and retail investor?
  94. If an individual wants to apply in NII quota the procedure is same or different while applying in physical mode and online mode?
  95. Is there any circuits at the time of IPO listing?
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