3.4 Investor Category In IPO

IPO & INVESTOR CATEGORY

  1. Qualified Institutional Bidders (QIBs):

    These are domestic and foreign institutions (registered with the SEBI) which are eligible to apply for public offers. These institutions normally apply for very large amounts. These include scheduled commercial banks, mutual funds, foreign institutional investors (FII) registered with SEBI, venture capital funds registered with SEBI, insurance companies registered with the Insurance Regulatory and Development Authority (IRDA), provident funds and pension funds with a minimum corpus of Rs 25 crore.
  2. Retail Investors:

    These are investors who invest up to a maximum of Rs 2,00,000.
  3. Non-Institutional Investors:

    These are investors who are neither in the QIB category nor in the retail investors’ category. Therefore, high net worth individuals (HNI) fall into this category.

    SEBI issues guidelines which specify the percentage of the total securities offered for each category of investors from time to time. Currently, in any IPO, the allocation is usually as under:

    QIB - 50%
    HNI - 15%
    Retail - 35%

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