IPO Subscription Status Explained — QIB, NII, and Retail Categories
During the 3-day bidding window of an IPO, the stock exchanges release live subscription numbers several times daily. Interpreting these numbers accurately helps you separate genuine institutional interest from retail hype.
1. The Three Primary Investor Categories
1. QIB (Qualified Institutional Buyers)
Institutional investors including Mutual Funds, Foreign Portfolio Investors (FPIs), insurance firms, and banks. Typically reserved 50% of the issue in book-built IPOs. They possess sophisticated research teams; heavy QIB subscription on Day 3 is considered the strongest vote of confidence.
2. NII / HNI (Non-Institutional Investors)
High Net-Worth Individuals, corporate bodies, and trusts bidding above ₹2 Lakhs. Subdivided into sHNI (applications between ₹2L and ₹10L) and bHNI (applications above ₹10L). Usually allocated 15% of the total issue.
3. RII (Retail Individual Investors)
Individual investors applying for a maximum total amount of ₹2 Lakhs. Reserved 35% of the issue in standard Mainboard offerings. Allotment in oversubscribed retail categories is conducted via computerized lottery.
2. When Do Institutional Investors Bid?
Retail investors often bid early on Day 1 or Day 2. However, large institutions (QIBs) and HNIs traditionally place their bids in the final hours of Day 3 (the closing day). Therefore, an IPO that appears undersubscribed on Day 1 or Day 2 can see its total subscription skyrocket past 50x or 100x by 4:00 PM on closing day.