Non-Institutional Investor (NII)

## Who an NII is In an Indian IPO, applicants are split into three buckets: Retail Individual Investors (RIIs) who apply up to ₹2 lakh, Qualified Institutional Buyers (QIBs) like mutual funds and FPIs, and Non-Institutional Investors (NIIs) in between. An NII — popularly called an HNI (High-Net-worth Individual) — is any non-institutional applicant bidding more than ₹2 lakh. This category also includes companies, trusts, NRIs and HUFs applying above the retail limit.

## The two sub-categories Since SEBI's 2022 reforms, the NII portion is split into two sub-buckets to make allotment fairer:

- Small NII (S-NII): applications above ₹2 lakh and up to ₹10 lakh — gets one-third of the NII quota. - Big NII (B-NII): applications above ₹10 lakh — gets the remaining two-thirds.

This split prevents the very largest bidders from crowding out mid-sized HNIs in hot IPOs.

## Allotment mechanics The overall NII reservation is typically 15% of the issue. Allotment is now by lottery (draw of lots) rather than purely proportionate when oversubscribed — another 2022 change. Earlier, allotment was proportionate, which encouraged HNIs to take expensive IPO-funding loans to apply for huge quantities; the lottery system blunted that game. NIIs cannot bid at cut-off price (only retail can) and must bid at a specific price within the band.

## Why it matters NII subscription numbers are a closely watched demand signal during the IPO bidding window — heavy S-NII and B-NII oversubscription often hints at strong listing-day interest, though it's not a guarantee. NIIs also typically apply without margin funding now (post the change to full upfront ASBA blocking via UPI/banks for the leveraged element), making the category more genuinely capitalised than before.

Practical tip: if you plan to apply above ₹2 lakh, you're an NII — know which sub-bucket you fall in, that allotment is by lottery, and that you must bid at a price (not cut-off). For most retail investors staying under ₹2 lakh keeps you in the retail bucket with its own, often better, proportional-or-lottery odds.