If you have ever been to a busy vegetable market and asked the vendor for the final best price instead of bargaining for every rupee, you are essentially asking for the Cut-off Price. In the stock market, when a company launches an IPO, they don't give you just one price; they give you a Price Band (for example, ₹100 to ₹105).

Now, if you are a regular person (a retail investor) and you really want those shares, you might be confused: Should I bid at ₹101? What if the final price is ₹105? Will I lose my chance? This is where the Cut-off Price comes in. It is a special auto-select button that tells the company: I am ready to pay whatever final price you decide at the end of the day. In 2026, choosing this option is the smartest move for small investors who don't want to get stuck in technical calculations.

What exactly is the Cut-off Price?

The Cut-off Price is the actual price at which the shares are finally issued to investors after the Book Building process is complete.

When an IPO opens, investors bid at different prices within the band. Once the IPO closes, the company looks at all the bids and finds the highest price at which they can sell all their shares. This final winning price is the Cut-off Price.

For Retail Investors: You can select the Cut-off checkbox on your app.
For Big Investors (NII/QIB): They cannot use the cut-off option. They must bid at a specific price.

Why Should You Always Choose Cut-Off Price?

As a retail investor, ticking the Cut-off Price box is the best strategy for two big reasons:

Safety from Rejection: If you bid at ₹102 and the company decides the final price is ₹104, your application will be rejected immediately. By choosing Cut-off, you ensure your bid is always valid, no matter what the final price is.
No Guesswork: You don't have to monitor the subscription data or guess what others are bidding. You simply agree to the final market-discovered price.

How the Payment Works?

When you choose Cut-off Price, the bank blocks the maximum amount (the Cap Price) in your account.

Scenario A: If the final price is the maximum (Cap Price), the full amount is taken.
Scenario B: If the final price is lower than the maximum, the company takes only the required amount and the balance is unblocked and returned to your account.

Example: The Math of Cut-off Price

Let’s say an IPO for Green Energy Ltd has a price band of ₹480 – ₹500 and a lot size of 30 shares.

If you bid at...

And the Cut-off is...

Your Status

₹485

₹500

Rejected (Bid was too low)

₹500

₹500

Valid (Eligible for lottery)

Cut-off Price

₹500

Valid (Eligible for lottery)

Cut-off Price

₹490

Valid (₹300 will be refunded to you)

Frequently Asked Questions (FAQs)

Is Cut-off Price the same as Market Price?

In an IPO, yes. It is the Market-discovered price. However, in regular trading, we use the term Market Price, while in an IPO, we use Cut-off Price.

Can I choose Cut-off Price for an application of ₹5 Lakhs?

No. The Cut-off Price option is only available for the Retail Category (up to ₹2 Lakhs). If you apply as an HNI (NII), you must specify a fixed price.

Does choosing Cut-off Price guarantee allotment?

No. Allotment depends on luck (lottery) if the IPO is oversubscribed. Selecting Cut-off only ensures your application is eligible for that lottery.

What happens if I don't check the Cut-off box?

You will have to enter a price manually. If your price is even 1 rupee lower than the final Cut-off, you will not get any shares.

Why is the Cap Price usually the Cut-off Price?

In most successful Indian IPOs in 2026, demand is so high that the final price almost always ends up being the maximum price (the Cap Price).

Is there a Cut-off Price in Fixed Price IPOs?

No. In Fixed Price IPOs, the price is already decided (e.g., ₹100). There is no price band, so there is no need for a Cut-off option.

Can I change from a fixed price to Cut-off Price later?

Yes, you can Modify your bid anytime while the IPO is open and switch to the Cut-off Price option.

What if the IPO is under-subscribed?

If not many people apply, the Cut-off Price might be at the bottom of the price band (Floor Price). In this case, you will get a refund for the extra money blocked.

Do I need to tell my bank the Cut-off Price?

No. When you apply through your broker, the system automatically tells the bank to block the maximum possible amount.

Is the Cut-off Price the same for NSE and BSE?

Yes. A company has only one Cut-off Price, which is the same across all exchanges where it lists.

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