HNI CATEGORY IPO SALE? (2024)

FAQs

What are the chances of IPO allotment in HNI category? ›

Q3: When I apply for an IPO in the HNI category, does that guarantee the allotment of shares? Answer: A HNI will receive full allocation if there is no oversubscription. If there is an over-subscription, then the allotment will be proportional.

One of the biggest advantages of applying for an IPO through the HNI category is that compared to the retail section, the chances of getting the allotment of shares are much higher under this category. Here you can apply for an IPO with an amount more than Rs. 2 lakh.

No lock-in for HNI bidders means they can sell shares on the IPO listing day. 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.

HNI allotment is done on a proportionate or lottery basis, depending on the oversubscription in the Non-Institutional Investor (NII) category. HNIs must submit their IPO applications for the NII category by 4 p.m. IST on the issue closing day. HNIs are not permitted to bid at the Cut-off Price.

No, the IPO allotment doesn't happen based on first come first serve. The allotment process totally depends on how the IPO got responses from the investors. If the IPO is undersubscribed, then the investor may get allotted all the lots for which they have applied.

How to calculate the probability of IPO allotment? Let's say there are 10,000 lots for retail investors in an IPO, and the total applications received are 20,000 (assuming each application is for 1 lot). If you have applied for 1 lot, the probability of receiving an allotment is 1/20 or 5%.

In each public issue, 15% of the total shares are reserved for the NII category, with one-third or 5% reserved for small HNIs and two-thirds or 10% for large HNIs. Prior to September 22, IPO allotment in the HNI category was done on a pro-rata or proportional basis.

Is HNI better than retail? ›

In general, the HNI category is reserved for wealthy individuals who can invest a significant amount of money in the IPO. This category typically has a higher probability of receiving an allocation compared to the retail category, which is open to smaller individual investors.

The minimum application amount is approximately Rs 2 lakhs. The investment amount limit for Big HNI is at least Rs 10 lakhs. But, in this case, the investors will receive shares worth Rs 2 lakhs on a lottery basis (same as small HNI).

The minimum limit for an HNI category is Rs. 2 lacs. You're an HNI only if you apply for shares above this amount. There is no maximum limit to this investment.

You can sell the shares you receive under HNI allotment anytime. There is a lockin period for anchor investors (QIBs) in the issue. 50% of their allotment can be sold after 30 days of the receipt of shares and the remaining after 90 days.

The allotment depends on the level of subscription in the IPO and the category in which the investor has applied. In most IPOs, the allotment is made by lottery because they are oversubscribed. Your chances of receiving an allocation are the same as other applicants.

Retail Individual Investors (RIIs)

This is one of the most common categories for applying for an IPO.

The allotment process totally depends on how the IPO got responses from the investors. If the IPO is undersubscribed, then the investor may get allotted all the lots for which they have applied. If the IPO is oversubscribed, the allocation of shares to the retail investor happens through a computerised process.

A high net-worth individual (HNI) falls under the category of investors in the Indian stock market. Individual investors exceeding its net worth value of Rs. 5 crore are categorised under high-net-worth individuals in India. These individuals are mostly business owners, corporate executives, entrepreneurs and more.