What is the difference between retail investor and HNI? (2024)

What is the difference between retail investor and HNI?

Investor Categories:Retail Category: This category is for individual investors who apply for IPO shares with smaller investment amounts. HNI Category: The High Net Worth Individual category is for investors who are classified as high net worth individuals and are willing to apply for larger quantities of shares.

Can I apply in HNI and retail both?

Q1: Can I apply to both the HNI and retail categories in an IPO? Answer: No, an individual cannot apply in the retail and HNI categories.

What is difference between HNI and NII?

HNI stands for High Net Individuals. Non-Institutional Investors (NIIs) are a category of IPO investors who apply for shares worth more than ₹2 lakhs in a public issue. They are often smaller investors who have less funds than the larger institutional investors. High Net Worth Individuals are part of the NII category.

What is the meaning of HNI investor?

A high net worth individual or HNI is a category of investor in the Indian stock market. Although there are no official criteria that an investor must meet to be classified as a HNI, individuals with a net worth exceeding ₹5 crore are widely considered to be in this category.

What is a retail investor?

What Is a Retail Investor? A retail investor, also known as an individual investor, is a non-professional investor who buys and sells securities or funds that contain a basket of securities such as mutual funds and exchange traded funds (ETFs).

Should I apply in HNI or retail category?

Advantages: Retail investors can apply in HNI for more than Rs 2,00,000 of shares which is not possible through Retail category. The allotment is made proportionately. Not like chances of rejection in oversubscribed scenario is more in RII category.

Is it better to apply in HNI category?

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.

Who qualifies as HNI?

As we have understood the HNI meaning, let's now learn about who is HNI in India and its types: High Net Worth Individuals (HNIs): Investors whose liquid assets are valued between Rs. 5 Lacs and Rs. 5 Crores.

Can retail investors apply as HNI?

Note that if a retail investor applies for more than Rs 2 Lakhs of shares in an IPO, the bid is considered as an HNI bid in the (Non-Institutional Investors) NII category.

Who is considered an HNI?

High net worth individuals, often referred to as HNWIs or HNIs, are individuals who have a significant amount of wealth and financial assets. These individuals are typically defined as having a net worth of at least $1 million, excluding the value of their primary residence.

How do you deal with HNI?

Who is considered a high-net-worth investor?

High-net-worth individuals (HNWIs) are people who have amassed investable (liquid) assets of $1 million or more. “Investable,” in this context, means their assets can be converted to cash within a reasonable time -- think cash, stocks, bonds, and some real estate investments.

How much is a high-net-worth investor?

Defining HNWI

The closest thing to a standardized definition of an HNWI comes from the Securities and Exchange Commission (SEC), which defines an HNWI as someone with a net worth of at least $2.2 million, or $1.1 million in assets managed by an advisor.

How do you identify retail investors?

Individuals investing up to Rs. 2 lakhs in an IPO are categorized by the SEBI as retail investors. Such investors are usually small-time individuals with low net worth and without the backing of large corporations.

What is an example of a retail investor?

Retail investors may include individuals who invest in stocks, bonds, mutual funds, ETFs, and other securities through a brokerage account or other financial institution.

What are the three types of investors?

The three types of investors in a business are pre-investors, passive investors, and active investors. Pre-investors are those that are not professional investors.

Who can be retail investor?

A retail investor is an individual or nonprofessional investor who buys and sells securities through brokerage firms or retirement accounts like 401(k)s. Institutional investors do not use their own money—they invest the money of others on their behalf.

Can HNI investors sell shares on listing day?

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. However, this is not applicable for HNI allotment.

What is the difference between investors and retail investors?

Institutional investors, like pension funds and hedge funds, manage large sums of money for clients. They have more resources and information, often with specialised teams. Retail investors, on the other hand, are individuals who trade securities for personal portfolios.

What is the cut off price for HNI category?

IPO applications of ₹2 lakh to ₹5 lakh are considered under the HNI category. Applications up to ₹5 lakh can be placed using UPI. For any amount above ₹5 lakh, use ASBA. See What is ASBA?

Can HNI bid at cut off price?

HNI/NII category also includes NRIs applying for more than Rs 200,000. HNIs are not entitled to Bid at the Cut-off Price. They have to bid at a fixed price in the issue price range. Not less than 15% of the Offer is reserved for Non-Institutional Portion.

How do I become an HNI investor?

HNIs opting to invest in IPOs must fill out the Application Supporting the Blocked Amount (ASBA) form. They can only make minimum investments of Rs2 lakhs, not below that. In the event that they are shortlisted for allotment, the relevant amount is blocked and on the date of allotment the amount is blocked.

How do I get my HNI status?

Steps for Applying as an HNI in IPO

HNIs opting to invest in IPOs must fill out the ASBA, or Application Supporting the Blocked Amount. In the event that they are shortlisted during allotment, the amount (minimum ₹2,00,000) that they had blocked for the IPO stock will then be debited from their accounts.

What net worth is considered rich?

According to Schwab's 2023 Modern Wealth Survey, Americans perceive an average net worth of $2.2 million as wealthy​​​​. Knight Frank's research indicates that a net worth of $4.4 million is required to be in the top 1% in America, a figure much higher than in countries like Japan, the U.K. and Australia​​.

What is considered wealthy in 2023?

$2.2 million

That's how much net worth an American needs to be considered wealthy in 2023, according to the Charles Schwab Modern Wealth Survey. The survey, which polled more than 1,000 adults online in March, asked Americans how much money a person in their area would need to be wealthy.