Today we will get familiar with the type of participants in an IPO. In each IPO some amount of shares are reserved for the participants of that category. Therefore it is very much necessary that you should know about the participants in IPO.
Retail Individual Investor (RII)
These are investors like us who usually apply for IPO less than 2 Lakh. Usually, 35% is reserved for retail investors. NRI who bid for less than 2 Lakh also come under this category.
High Networth Individual (HNI)
When retail investors apply for more than 2 Lakh they come in this category.
Qualified Institutional Bidders (QIB’s)
Financial Institutions, Banks, FII’s and Mutual Funds who are registered with SEBI are called QIB’s. They do not have a minimum threshold of 2 Lakh but usually, they apply in very high quantity.
Non-institutional bidders
This is the last category among investors and these investors are not registered with SEBI. They also apply for more than 2 Lakh and usually have 15% reservation in total IPO.
References
1. Chittorgarh
2. Quora
Read: How to identify right IPO?
