What are retail investors in IPO?

Retail investors in an IPO are individuals, NRIs or HUFs who invest up to Rs 2 lakhs in an IPO. IPOs have a reserved quota for retail investors.

Benefits of the retail investor (RII) category in an IPO

• Permission to bid at cut-off price.
• They can withdraw their bids while the issue is still open.
• Some IPOs offer a discount to RIIs. i.e. LIC IPO offer Rs 45 discount to retail investors.
• At least 35% of IPO shares are reserved for retail investors in book-building IPOs.
• In the event of oversubscription, allocation is by lottery.
• There is no lock-up period for retail investors.

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