How can HNIs apply for IPO and share allotment process

This IPO News guide/article covers “How can HNIs apply for IPO and share allotment process”. The page is organized around who are hnis or niis?, types of hni investors in an ipo, hni ipo category reservation quota, how to apply for ipo in the hni category?, steps to apply in an ipo under hni/nii category through asba;. IPO News presents the structured facts and tables in its own layout and wording.

Topics Covered

• Who are HNIs or NIIs?
• Types of HNI investors in an IPO
• HNI IPO Category Reservation Quota
• How to apply for IPO in the HNI category?
• Steps to apply in an IPO under HNI/NII category through ASBA;
• HNI IPO Apply Rules and restrictions
• HNI IPO Allotment Rules and Regulations
• HNI IPO Allotment Rules
• HNI IPO Allotment Process Example
• HNI IPO Benefits
• Zerodha Trade@20
• Frequently Asked Questions
• 1. Who can apply in HNI category?−
• 2. Can HNI apply in both retail and NII category?+
• 3. Can HNIs apply in an IPO through UPI?+
• 4. How can HNI subscribe to an IPO?+
• 5. How shares are allotted in HNI category?+
• 6. Can HNIs cancel their IPO application before allotment?+
• 7. How to get guaranteed allotment in the HNI category?+
• 8. What is the cut-off time for IPO application by HNIs?+
• 9. How can HNI apply in an IPO with Zerodha?+
• Compare Stock Brokers Side-by-Side

Key Facts

• India's trusted financial research platform since 2015. Live IPO GMP, subscription data, allotment status, Rights Issues, NCDs and unbiased stock broker reviews.
• There are 3 types of IPO investors; retail investors (RII), Non-Institutional investors (NIIs), and Qualified Institutional investors/bidders (QIBs).
• All HNIs, Indian residents, NRIs, HUFs, FPIs, Trusts, corporate bodies, and companies who make an IPO application of Rs 2 lakh or above fall in the NII category.
• Non-institutional investors (NIIs) need not be registered with SEBI.
• Small NIIs: Any investor who submit an IPO application worth bidding amount of Rs 2 lakh – 10 Lakh is considered as small NII.
• Big NIIs: IPO bidders whobid for above Rs 10 lakh in HNI category, are known as big NIIs.
• As per the market regulatory authority SEBI, every IPO must have minimum 15% shares reserved for NIIs.
• An HNI cannot invest less than Rs 2 lakh in an IPO.
• Unlike retail investors, HNIs cannot bid at cut-off price. They can submit IPO applications between the price band at any price.
• Non-institutional investors or NIIs cannot withdraw, cancel, or revise their bids.
• Not less than 15% of the total offer size is reserved for NIIs.
• An HNI cannot apply in both the RII and NII categories.
• The cut-off time for IPO bidding under NII category is 4 PM on the IPO issue closing date.
• (Number of lots applied/NII category over-subscription)*Shares in 1 lot
• Suppose an IPO receives100 times subscription in the NII category, and if an NII investor has applied for 1000 shares, then HNI bidder will surely receives allotment of 10 shares.
• However, other HNI applicants who have bid for less number of shares than category oversubscription by NIIs, lottery system will be followed for allocation of shares.
• Most HNI investors take IPO funding at 8% to subscribe to an IPO.
• Only those IPO bids under NIIs that are made at or above the offer price are considered for allotment.
• NIIs who have applied for more lots than the issue oversubscription, shares will be allotted proportionately.
• Applied for less number of lots than the category oversubscription, % wise allocation is done through draw of lots.
• Likewise retail category, HNI bid amount gets blocked in the bank account until allotment. A debit will only take place for successful allotment.
• Suppose a public issue gets subscribed by 200 times NIIs and all IPO applications made by NIIs are for 200 lots. Here, as every applicant has bid for issues oversubscription times, every HNI investor will receive 1 lot.
• Opportunity to buy IPO stocks for more than Rs 2 lakh.
• Does not require SEBI registration.
• Likewise residents, NRIs can also make an IPO bid as an NII.
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• Any resident in India, NRI, HUF, companies, and trust who want to invest more than Rs 2 lakh in an IPO can submit an IPO application as an HNI.
• Also, any retail investor who want to invest Rs 2 lakh or more in an IPO, he/she must place an IPO bid under NII category.
• No, an investor can make an IPO application either in the RII or NII category. An investor cannot bid under both categories.
• If an individual places two bids as retail and HNI investor, both of the applications will be rejected.

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