Definition
Book Built Issue Categories
In a book-built IPO, the net offer is split into reserved portions for QIBs, non-institutional investors and retail investors.
Under SEBI ICDR Regulations, a standard book-built mainboard IPO reserves at least 50% of the net offer for QIBs, at least 15% for non-institutional investors (NIIs) and at least 35% for retail individual investors. Where the company qualifies only via the alternative route, the QIB portion rises to 75% and retail falls to 10%.
Unsubscribed shares in one category can, within rules, spill over to others. Eligible employees and existing shareholders may also have separate reserved quotas disclosed in the offer document.
Related terms
- Retail Individual Investor (RII)An RII is an individual investor applying for up to ₹2 lakh in an IPO, who gets a reserved quota and can bid at the cut-off price.
- Non-Institutional Investor (NII)An NII, often called an HNI, applies for more than ₹2 lakh worth of shares in an IPO, falling between the retail and QIB categories, with its own quota and allotment rules.
- Qualified Institutional Buyer (QIB)A QIB is a large, sophisticated institutional investor, such as a mutual fund, bank, insurer or FPI, that is allotted a dedicated portion of an IPO under SEBI's rules.
Plain-English explainer from Investdesk Investors Encyclopedia. General information, not financial advice.