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