Differentiate between RII,NII,QIB, & Anchor Investor

Shareholders may apply for shares in any of the following categories

1. Retail Individual Investor (RII).

   • Indian resident Individuals, NRIs, and HUFs are under RII category who's application below Rs.2 lakhs in an IPO.
   • 35% or more of the Offer are reserved for RII categories.
   • NRIs and HUFs who apply for IPOs with less than Rs 2,00,000.000 may apply in RII.
   • RII Category allows bids at cut off price.
   • Allotment Basis
     • If IPO is not oversubscribed in RII Categories, all applicants will be given full allocation.
     • If IPO is undersubscribed in this category - The allotment for each investor shall not exceed the minimum Bid Lot. This is subject to the availability of Equity shares in the Retail Portion.  No matter how many shares an applicant applied, if the IPO is sold in retail two times, one of the 2 applicants will be awarded 1 lot.      

       Investor A applied for Rs 2 Lakhs (15 lots), while investor B applied to 1 lot, and investor C applied to Rs 1 Lakh (7 lots) in an IPO. If IPO subscribes 3 times in RII category, only one applicant will get 1 lot. It doesn't matter how much shares they applied.

   • Non-institutional and retail bidders are allowed to withdraw bids up until the day before allotment.
   • Notice:
     • Always apply at the cut-off price for this category.
     • Apply only 1 lot to an IPO application if the IPO is oversubscribed
     • Apply through multiple accounts under your family member's name to maximize your allotment

2. Non-institutional bidders

   • Resident Indians, eligible NRIs, HUFs and companies who apply for more than Rs 2 lakhs in IPO shares fall under the NII category.
   • NII do not need to register with SEBI.
   • 15% or more of the Offer will be reserved for the NII category.
   • High Net Worth Individual (HNI) who submits for more than Rs 2 Lakhs to an IPO falls within this category.
   • Allotment Basis: Proportionate. Investors who apply for 100 shares in NII will receive 1 share if the IPO is subscribed 100x.
   • NII quotas are subject to high oversubscription because of its small size. Many investors use IPO Funding for this purpose. This category is popular with many investors who apply for shares worth 100 crore rupees.
   • Non-institutional bidders can withdraw their bids up to the day of allotment.
   • NII's cannot bid at a cut-off price.

3. Qualified Institutional Bidders, (QIB)

   • QIB is open to all public financial institutions, commercial banks and mutual funds, as well as Foreign Portfolio Investors. Institutions can apply for this category by registering with SEBI.
   • QIBs are entitled to 50% of the offer size
   • Proportionate Allotment Basis
   • QIBs represent small investors who invest in mutual funds, ULIP programs of insurance companies, and pension plans.
   • According to SEBI guidelines, QIBs cannot withdraw bids after the close-of-IPOs.
   • QIBs cannot bid at a cut-off price.

4. Anchor Investor

   • An anchor investor is a qualified institutional buyer (QIB), who applies for a book-building transaction with a value greater than Rs 10 crores. To boost investors' confidence, an anchor investor can be attracted to public offerings before they hit the markets.
   • Anchor Investors can receive up to 60% of QIB Category.
   • Anchor Investor Price is determined separately
   • Anchor investor has different Anchor Investor Bid/Offer Periods
   • Minimum application size for anchor investors should not exceed Rs 10 crores. The anchor investor category does not allow merchant bankers, promoters or their families to apply for shares. There can be no more than 15 anchor investors for offers less than Rs 250 crores. However, SEBI recently lifted the limit on the number of anchor investor in cases where the offer is larger than Rs 250 crores.
   •  To bid at a cut-off price anchor investors are not allowed.