Key Features of NII Category in IPOs

Non-institutional bidders are allocated 15% of the total shares offered in an IPO. One of the advantages for NIIs is that they have the flexibility to withdraw their bids at any point up until the allotment date. However, unlike retail investors, NIIs cannot place bids at cut-off prices. Additionally, there are two subcategories of NIIs: small NIIs (sNII), who bid up to Rs. 10 lakhs, and big NIIs (bNII), who place bids exceeding Rs. 10 lakhs. Importantly, all NIIs must be registered with SEBI to participate in the bidding process.

Who Qualifies as a Non-Institutional Bidder?

Several groups qualify as NIIs, including resident and non-resident Indian individuals, Hindu Undivided Families (HUFs), resident Indian companies, corporate entities, societies, trusts, and scientific institutions. The way shares are allotted to NIIs depends on whether they fall into the small or big non-institutional bidder category.

Understanding the NII category is crucial for those who are involved in IPOs and looking to invest more than Rs. 2 lakhs. This classification impacts both the bidding process and the likelihood of share allocation in a company’s public offering.