Answer
The Non-Institutional Investor (NII) category is mainly for big investors. These investors are often called High Net-worth Individuals (HNIs).
Who is an NII?
The main rule for becoming an NII is the amount you invest. Anyone who applies for an amount more than ₹2 lakh in an IPO is automatically put into the NII category. This includes resident Indians, Non-Resident Indians (NRIs), Hindu Undivided Families (HUFs), trusts, and companies.
Important Details about the NII Category:
Minimum Application: You must invest over ₹2 lakh.
No SEBI Registration: Unlike Qualified Institutional Buyers (QIBs), NIIs do not need to register with the Securities and Exchange Board of India (SEBI).
Sub-categories:
Small NIIs (sNII): Apply for amounts between ₹2 lakh and ₹10 lakh.
Big NIIs (bNII): Apply for amounts above ₹10 lakh.
Rules and Restrictions:
- NIIs cannot bid at the ‘cut-off price’ (the price decided after the bidding ends).
- Once a bid is placed, NIIs cannot take it back (withdraw the bid) before the allotment happens.
- Allotment Process: The shares are given out based on a proportionate basis (depending on the subscription level). This is different from the lottery system used for small retail investors.