What are the different types of IPO investors?

14 May 2021|

1 min read |

by ICICI Securities Team

IPOs have always piqued investors' attention because they offer a great opportunity to invest in high-quality businesses looking to raise capital. Strong stable companies' initial public offerings (IPOs) provide a win-win situation for both the business and the investors.

Whenever an initial public offering (IPO) gets announced, you have already heard that there are many types in which investors can invest. Different slots for different types of investors are also available for the IPO subscription. A reserved quota or percentage of shares – out of the total number of shares that the organisation wishes to list – exists for each category.

In comparison to individual investors, larger institutions or institutional investors are preferred buyers of stock for businesses. As a result, these preferred stockholders have slots available on various dates and times. The number of shares allotted gets determined by the category in which one has applied. Let us look at all the different ways individuals, institutions, and others can invest in a business through its initial public offering.

Retail Individual Investors (RII):
This is the most popular reason for submitting an IPO application. It includes both resident Indians and non-resident Indians, as well as HUFs. The maximum sum that can be invested in this category is Rs. 2 lakhs. This category allows bidding at the cut-off price, with RII receiving at least 35% of the total offer.
Non-institutional bidders (NII):
The NII category is open to all Retail Category applicants who wish to apply for an amount greater than two lakhs. This group receives a minimum of 15% of the bid. Non-institutional bidders are eligible for 15% of the total offer. They have the option of withdrawing their bids before the day of the allotment. They are not, however, entitled to bid at the cut-off price.
Qualified Institutional Bidders QIB):
This group includes all public financial institutions, commercial banks, foreign portfolio investors, mutual funds, and other similar entities. All such organisations necessarily need to be registered with SEBI before applying. A limit of 50 % of the bid gets reserved for QIBs. They are not allowed to bid at cut off the price and cannot withdraw their offers after the closing of the IPO.
Anchor Investor:
This group includes Qualified Institutional Buyers applying to invest ten crores or more through the book-building process. Up to 60 % of the QIB group may be allocated to Anchor Investors. The price of the problem for Anchor Investors gets set separately. Anchor Investors need a minimum application size of 10 crores, and merchant bankers, promoters, and their immediate relatives are not eligible. They cannot bid at the cut-off price because they are not eligible.
Foreign Institutional Investors (FII):
This group includes all foreign investors who are citizens of another country and wish to invest in an IPO. This IPO investor prefers to invest in companies from emerging economies with fast growth rates, such as India.

Disclaimer

ICICI Securities Limited has its registered office at ICICI Venture House, Appasaheb Marathe Marg, Prabhadevi, Mumbai - 400025, India, Tel No:- 022 - 2288 2460, 022 - 2288 2470. The non-broking products / services like iLearn and Financial Learning are not exchange traded products / services and ICICI Securities Ltd. is just acting as a distributor/ referral Agent of such products / services and all disputes with respect to the distribution activity would not have access to Exchange investor redressal or Arbitration mechanism. iLearn is not an exchange traded product/service of ICICI Securities Ltd. All disputes with respect to the activity on the platform would not have access to Exchange investor redressal or Arbitration mechanism.

ICICI Securities Ltd. is a Member of National Stock Exchange of India Ltd (Member Code :07730), BSE Ltd (Member Code :103) and Member of Multi Commodity Exchange of India Ltd. (Member Code: 56250) and having SEBI registration no. INZ000183631. ICICI Securities Ltd. is a SEBI registered with SEBI as a Research Analyst vide registration no. INH000000990. Name of the Compliance officer (broking): Mr. Atul Agrawal, Contact number: 022-69997051, E-mail address: complianceofficer@icicisecurities.com Investments in securities markets are subject to market risks, read all the related documents carefully before investing. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. ICICI Securities Ltd. and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. Such representations are not indicative of future results. The securities quoted are exemplary and are not recommendatory. AMFI Regn. No.: ARN-0845. PFRDA registration numbers: POP no -05092018. ICICI Securities Ltd. acts as a Composite Corporate agent having registration number -CA0113. Mutual Fund Investments are subject to market risks, read all scheme related documents carefully. Please note, Mutual Fund, Corporate Fixed Deposits, Bonds, Alternate investment funds, Tax planning, Succession planning, NPS, IPO, Investment Advisory and Loans related services are not Exchange traded products and ICICI Securities Ltd. is acting as a distributor to solicit these products. Please note, Insurance related services are not Exchange traded products and ICICI Securities Ltd. is acting as a corporate agent to solicit these products. All disputes with respect to the distribution activity, would not have access to Exchange investor redressal forum or Arbitration mechanism. The non-broking products / services like Research, etc. are not exchange traded products / services and all disputes with respect to such activities would not have access to Exchange investor redressal or Arbitration mechanism. The contents herein above are solely for informational purpose and may not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments or any other product. Investors should consult their financial advisers whether the product is suitable for them before taking any decision. The contents herein mentioned are solely for informational and educational purpose.

Did you enjoy this article?

428 people liked this article. Share Feedback

Recent Articles

View all

Understanding Contango in Commodity Markets

Understand contango in commodity trading, how futures prices differ from spot prices, and how financing, storage and insurance costs influence commodity pricing.

214 views

1 minutes

19 Oct 2026

Know Your Commodity Before You Trade: Copper

Copper is a widely used base metal known for its electrical and thermal conductivity, strength, ductility and corrosion resistance. It is used across electrical wiring, construction, machinery, power infrastructure and several industrial applications.

426 views

2 minutes

09 Oct 2026

Know your commodity before you trade - Natural Gas

Natural Gas is a widely traded energy commodity used for electricity generation, industrial activity, heating and other applications. Its prices can react sharply to weather, supply and demand, inventories, global energy markets and geopolitical developments.

705 views

1 minutes

30 Sep 2026