What is the difference between HNI and NII in an IPO Application?

IPO application worth more than ₹2 lakh becomes an HNI, and your application falls under the larger NII category.

HNI vs. NII: A Simple Difference

NII (Non-Institutional Investor): This is the main, or parent, category defined by SEBI (Securities and Exchange Board of India). It includes all investors who are not small retail investors and not large professional buyers (like banks or mutual funds).

• Who is included: HNIs, corporate bodies, trusts, and societies.
• Minimum Investment: Above ₹2 lakh.

HNI (High Net-worth Individual): This is a specific type of investor that fits inside the NII category.

• Who is included: Only individual investors (Indian residents, NRIs, and Hindu Undivided Families/HUFs).
• Minimum Investment: Above ₹2 lakh.

How the NII Quota is Divided

The total NII quota for an IPO is 15%. Since 2022, SEBI has split this 15% into two smaller parts to make the allotment fairer:

Key Rules for HNI/NII Bidders

Unlike the small retail category, investors in the NII/HNI group must follow special rules:

1. You cannot choose the “cut-off price” option. You must choose a specific price within the given price range.
2. Bids are Mostly Locked: Once you place a bid, you cannot cancel it or reduce the price or quantity. You can only increase the price or the number of shares you want.
3. Allotment Method: Shares are usually allotted on a proportionate basis (meaning you get shares based on how much you bid). A lottery system is used to make sure every winning bidder gets at least the minimum application size of ₹2 lakh.
4. Payment Rules:

Up to ₹5 lakh: You can use UPI (Unified Payments Interface) for payment.

Above ₹5 lakh: You must use the ASBA (Application Supported by Blocked Amount) facility through your net banking portal.