Cut-off Price

## What it means Most Indian IPOs use the book-building method, where the company offers a price band (for example ₹95–₹100) rather than a fixed price. Investors bid within the band, and the cut-off price is the single final price at which the issue is allotted — discovered from the demand collected across all bids. Bidding "at cut-off" means you don't pick a specific price; you simply agree to pay the final discovered price, whatever it is within the band.

## Why retail investors use it Bidding at cut-off is the safest way for retail investors to maximise allotment chances. If you bid at a specific price below the eventual cut-off, your application is rejected. By choosing cut-off, your bid is always valid at the top of the band, so you remain in the running regardless of where the price settles. SEBI allows only retail individual investors (and employees) to use the cut-off option; QIBs and NIIs must bid at specific prices.

## The mechanics in India You apply through ASBA/UPI, and the system blocks money at the upper end of the band (since the cut-off can't exceed it). If the final cut-off is lower, the difference is unblocked/refunded automatically. The registrar to the issue finalises allotment, and oversubscribed retail demand is settled by lottery on lot-size, not by who bid higher — another reason cut-off bidding is standard for retail.

## Practical notes - Always tick "cut-off" as a retail applicant unless you have a strong reason to bid a specific price. - Ensure your linked bank account has enough balance for the upper band price × lots, because that's what gets blocked. - The cut-off price becomes the issue price printed on the listing; your listing-day gain or loss is measured against it.

In short: the cut-off price is where supply meets demand in a book-built IPO, and for retail applicants, bidding at cut-off is the simplest path to staying eligible for allotment.