In the Indian stock market an IPO is like a grand feast where different guests are invited to sit at different tables. SEBI (the market regulator) has divided all investors into specific categories to make sure that a few big players don't take away all the shares leaving nothing for the common man.

Each category has its own reserved quota meaning a fixed percentage of shares is set aside just for them. For an investor in 2026 knowing which table, you belong to is crucial because it decides your investment limit, your bidding rules and even your chances of winning the allotment lottery. Whether you are a college student with ₹15000 or a wealthy businessman with ₹15 Crore there is a specific category designed for you.

The 4 Main Categories of IPO Investors

As of 2026, these are the four distinct groups that participate in a Mainboard IPO:

1. Retail Individual Investors (RII)

These are everyday people like you and me.

Investment Limit: Up to ₹200000.
Reserved Quota: Usually 35% (can be 10% for some loss-making companies).
Allotment Method: Computerized Lottery. Even if you apply for 10 lots you get a maximum of 1 lot if you win the lottery.
Special Perk: They are the only ones allowed to bid at the Cut-off Price.

2. Non-Institutional Investors (NII) / HNIs

This category is for wealthy individuals, trusts and companies that want to invest big.

Investment Limit: Above ₹200000.
Reserved Quota: 15%.
Sub-Categories (2026):
- Small NII (sNII): ₹2 Lakh to ₹10 Lakh.
- Big NII (bNII): Above ₹10 Lakh.
Allotment Method: Proportional. If the NII portion is oversubscribed 10x you get 1/10th of the shares you asked for.

3. Qualified Institutional Buyers (QIB)

These are the Big Fish of the market professional organizations with massive capital.

Who they are: Mutual Funds Banks Insurance Companies and Foreign Portfolio Investors (FPIs).
Reserved Quota: Up to 50% (can be 75% for certain issues).
Rule: They must be registered with SEBI and are not allowed to bid at Cut-off.

4. Anchor Investors

A special subset of QIBs who provide the initial anchor or stability to the IPO.

Investment Limit: Minimum ₹10 Crore.
Timing: They bid and get allotment 1 day before the IPO opens for the public.
Lock-in Period: In 2026 they have a lock-in (cannot sell) for 30 to 90 days to prevent them from dumping shares on day one.

Comparison Table: Investor Categories (2026)

Feature

Retail (RII)

NII / HNI

QIB

Max Investment

₹2 Lakh

No Limit

Reserved Quota

35%

15%

50%

Cut-off Price

Allowed

Not Allowed

Bid Withdrawal

Allowed

Not Allowed

Allotment Style

Lottery (1 Lot)

Proportional

Proportional / Discretionary

Frequently Asked Questions (FAQs)

Can I apply in both Retail and NII categories?

No. If you use the same PAN card to apply in both both applications will be rejected as multiple bids.

Is a Minor considered a Retail Investor?

Yes. A child can have a Demat account and apply as a Retail Investor provided the application is signed by a guardian.

Why do QIBs get 50% of the shares?

QIBs provide price discovery and credibility. If big banks are buying 50% of the company it gives regular people confidence that the business is solid.

Can an NRI apply as a Retail Investor?

Yes. Non-Resident Indians can apply in the Retail category if their application is up to ₹2 Lakh using their NRE/NRO accounts.

What is the Employee Quota?

Some companies reserve a small portion (usually 5%) specifically for their staff. Employees often get a special discount on the share price.

Do NIIs get a discount?

No. Generally, discounts are only offered to the Retail and Employee categories.

Can a Partnership Firm apply in the Retail category?

No. Firms and companies are always treated as Non-Institutional Investors (NII) even if they invest less than ₹2 Lakh.

Why are Anchor Investors important?

If blue-chip global funds become Anchors it creates a massive hype and ensures the IPO will be successfully subscribed by others.

What is the Proportional Allotment in NII?

If you apply for 1000 shares and the NII portion is 20 times oversubscribed you are guaranteed to get exactly 50 shares (1000 / 20).

How do I know which category is best for me?

If you have exactly ₹2 Lakh stay in Retail to enjoy the lottery and potential discounts. If you have ₹2.1 Lakh or more you automatically move to NII.

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