Do you think the abbreviations just come from Millennial and Generation Z people? There are only short forms like lol and rofl and yolo and fomo? No. The stock market also loves short forms and RII, NII & QIB are some of the short forms that are specifically associated with IPO.
However, IPO itself an short form for company’s initial public offering – Which means that the company is offering its shares to the general public for the first time. Lets discuss all of them one by one with meaning and NII full form so you can clearly understand all of them.
Table of Contents
RII Full Form and Meaning
The Full Form of RII is Retail Individual Investors. This is the major category for General public as any Indian Citizen can apply under this category. People match the following criteria can apply under RII Category :
- Individuals who are willing to invest less than INR 2 lakhs who apply for an IPO under the RII category.
- A minimum of 35% of the Offer is set aside for the RII category. However, in some cases it can be only 10% as well.
- NRIs or HUFs also can apply in the RII category if they are investing less than INR 2 Lakh in any IPO.
- In the RII category, you can bid at the cut-off price.
Allotment in RII category
- Full allotment to all applicants if the IPO is not over-subscribed in the RII Category.
- If the IPO is oversubscribed in this segment, each investor will be allocated at least the minimum Bid Lot, subject to the availability of Equity Shares in the Retail Portion. If an IPO is subscribed twice in the retail category, one out of every two applicants will receive one lot, regardless of how many stocks they applied for.
Example of Oversubscribed IPO
In an IPO at cut-off price, say X submitted for Rs 2 lakhs (15 lots), Y applied for 1 lot, and investor Z applied for Rs 1 lakh (7 lots). If an IPO is subscribed to three times in the RII Category, the allotment will be done by lottery, with just one of the three applicants receiving one lot. It makes no difference how many shares they’ve applied for.
Note
- Retail and non-institutional bidders can withdraw their offers till the day of allotment.
- In this category, please apply at the cut-off price to maximize the chance of allotment.
- Apply only one lot per IPO application if the IPO is oversubscribed.
- Apply through numerous accounts of your family members’ to increase your allotment chance.
NII Full Form and Meaning
NII Full Form in IPO is Non institutional Investors. However, they are also known as Non-institutional bidders. NII meaning in ipo are some high net-worth Investors who wish to apply in IPO from their personal wealth or some trust and government bodies. Following are the criteria for apply Under NII in IPO.
- The NII category includes residents of India, eligible NRIs, HUFs, corporations, corporate organisations, scientific institutes, societies, and trusts who apply for more than Rs 2 lakhs in IPO shares.
- SEBI does not require NII to register.
- A minimum of 15% of the Offer is set aside for the NII category.
- This category includes high-net-worth individuals (HNIs) who apply for more than Rs 2 lakh in an IPO.
Allotment in NII Category
- Proportionate allotment take place in NII category.
- For instance, if an IPO in the NII category is subscribed 100 times, investors who filed for 100 stocks will receive 1 share.
- Since the NII quota is modest, it receives a lot of over-subscription, and many individual investors use IPO Funding to apply in this group. Many of these investors apply for stocks worth hundreds of crores of rupees in this category.
- Non-institutional bidders can withdraw their offers until the day of allotment.
- Bidding at the cut-off price is not permitted for NIIs.
QIB Full Form in IPO and Meaning
QIB Full Form in IPO is Qualified Institutional Investors. This category decided the IPO response in most of the cases as these institutions attend roadshows from the company and know much for then other two categories about the company and its plans. Following are the criteria to apply under QIB in IPO.
- In the QIB category, public financial institutions, commercial banks, mutual funds, and foreign portfolio investors, among others, can apply. Institutions must be registered with SEBI to apply for this category.
- For QIBs, Minimum 50% of the Offer Size is set aside. Which can go to 75% in some cases.
Allotment in QIB Category
- Allotment will be done in a proportionate manner.
- QIBs are mostly representatives of small investors who invest in mutual funds, insurance company ULIP plans, and pension plans.
- SEBI standards restrict QIBs from withdrawing their bids after the IPOs have closed.
- At the cut-off price, QIBs are not allowed to bid.
Anchor Investors
A qualified institutional buyer (QIB) submitting an application for a value of Rs 10 crores or more via book-building process is referred to as an anchor investor in a public offering. An anchor investor might help enhance investor confidence by attracting them to public offerings before they go public.
Allotment
- Anchor Investors are eligible for up to 60% of the QIB Category.
- The price of the Anchor Investor Offer is determined separately.
- The Anchor Investor Bid/Offer Period varies for every Anchor Investor.
- Each anchor investor’s application should be worth at least Rs 10 crores. Under the anchor investor segment, no merchant banker, promoter, or their family are eligible to apply for stocks. There can be a maximum of 15 anchor investors in offers under Rs 250 crores, but SEBI has eliminated the cap on the number of anchor investors in offers beyond Rs 250 crores.
- Anchor investors are barred from bidding at the cut-off price.
Conclusion
Hope now you understand RII, QIB and NII meaning in IPO along with Anchor investor concept. However, Anchor investors and QIB in IPO are the ones who make major impacts on any company’s IPO.
This is all from our side regarding Difference & Full Form of NII , RII , QIB and Anchor Investor. Please sharing your thoughts about nii full form in IPO in the comment section.
Other interesting Blogs related to NII full Form
Frequently Asked Questions About RII Full Form
What is RII and NII in IPO?
Investors can invest in a variety of categories when a firm conducts an IPO: Retail Individual Investor (RII) is a term that refers to a person who invests in the stock market as general public (less then INR 2 lakh ). Non-Institutional Investor (NII) is a term used to describe a person who does not associated with a financial institution but want to invest more then INR 2 Lakh. Qualified Institutional Bidder (QIB) is an acronym for Qualified Institutional Bidder majorly banks and financial firms.
RII full form in IPO
RII full Form in IPO is Retail Individual Investor.
Who is NII investor?
Non-institutional bidders are individuals, NRIs, corporations, trusts, and other entities that bid for more than Rs 2 lakh.
how to become nii investor?
To invest in an IPO under the NII category, you must bid for more than 2 lakh rupees in equity shares. Only ASBA's Net banking facility or the hardcopy IPO application form are available for bidding on the NII IPO application.
Who are QIB in India?
Investors that follow SEBI's laws and regulations are known as Qualified Institutional Buyers (QIB). According to SEBI, QIBs are institutional investors with the competence and financial resources to analyse and invest in capital markets.
