What is the HNI category in an IPO?

HNI stands for high net-worth individual. In an IPO it means anyone who applies for more than ₹2 lakh. The official name of the category is NII, non-institutional investors; HNI and NII mean the same portion of the issue.

Quick answers

HNI full form: high net-worth individual. NII full form: non-institutional investor. In IPOs the two words mean the same category.

Who is in it: individuals (and companies, trusts, NRIs and others that are not institutions) bidding more than ₹2 lakh.

Two parts: small HNI (sHNI or sNII), bids above ₹2 lakh up to ₹10 lakh; big HNI (bHNI or bNII), bids above ₹10 lakh.

Usual size: 15% of a mainboard IPO, of which one third is for small HNI and two thirds for big HNI.

Small HNI and big HNI

Since 2022, SEBI's rules split the non-institutional portion in two: one third is reserved for applications from just above ₹2 lakh to ₹10 lakh, and two thirds for applications above ₹10 lakh. Shares left over in one part can go to the other.

That is why IPO subscription figures often show 'NII', 'sNII' and 'bNII' separately: each part is subscribed, and allotted, on its own.

Worked example: how many lots for retail, small HNI and big HNI

Take an IPO priced at ₹200 with a lot of 75 shares, so one lot costs ₹15,000.

Retail: up to ₹2 lakh, so 1 to 13 lots (13 lots = ₹1,95,000).

Small HNI: the minimum is the first lot count above ₹2 lakh, 14 lots (₹2,10,000); the maximum is the most lots within ₹10 lakh, 66 lots (₹9,90,000).

Big HNI: from 67 lots (₹10,05,000) upwards, up to the IPO's maximum bid.

The numbers change with every IPO's price and lot size. Each IPO's page on IPO Khata has a 'How many shares to bid for' table with the minimum and maximum shares and lots for retail, small HNI and big HNI, worked out at the top of the price band.

How HNI allotment works

When the HNI portion is oversubscribed, shares are not shared out in proportion to the amount applied for. Each successful applicant gets the minimum HNI application size (the smallest number of lots that crosses ₹2 lakh), and winners are picked by a draw, much like the retail lottery. Shares left after that are allotted proportionately.

So in an oversubscribed IPO, a ₹2.1 lakh small-HNI bid and a ₹9.9 lakh bid usually have a similar chance of getting the minimum allotment. As a rough guide, if a part is subscribed X times, about 1 in X applications at the minimum size gets an allotment.

Reading HNI subscription and your odds

Look at the small HNI (sNII) and big HNI (bNII) subscription figures separately, not the combined NII number. They are often very different: big HNI is frequently subscribed several times more than small HNI, or the other way round.

Example: if small HNI is subscribed 40 times, roughly 1 in 40 applications at the minimum small-HNI size gets an allotment of that minimum (14 lots in the example above). Bidding 66 lots instead of 14 blocks almost five times the money for a similar chance.

When a part is subscribed less than about once, every valid application in it gets shares, and bigger bids get more.

How to apply as HNI

Choose the HNI or NII category in your broker app or net banking, and bid for enough lots to cross ₹2 lakh. HNI bids cannot use the cut-off price: you bid at a specific price, normally the top of the band.

UPI handles bids only up to ₹5 lakh, so larger HNI bids go through net banking (ASBA). Once placed, an HNI bid cannot be withdrawn or reduced.

Common questions

Do I need a high net worth to apply as HNI? No. In IPOs, HNI is about the size of the bid, not your wealth. Anyone bidding more than ₹2 lakh is in the HNI (NII) category.

Can HNI apply at the cut-off price? No. Cut-off bidding is only for retail, employee and shareholder quota bids. HNIs bid at a stated price, usually the top of the band.

Can an HNI bid be cancelled? No. HNI bids cannot be withdrawn or lowered once placed, only increased while the issue is open.

Does a bigger HNI bid improve my chances? In an oversubscribed part, hardly: each winner gets the minimum size. It only helps when the part is not fully subscribed.

Is the money blocked for longer? No. As with retail, the amount is blocked from the mandate until the allotment, then released or debited about a day after.

Common HNI mistakes

Applying as HNI and retail with the same PAN: both applications are rejected.

Using UPI for a bid above ₹5 lakh: it won't go through. Use net banking (ASBA).

Funding a big HNI bid with an expensive loan on the hope of a listing gain: if the IPO lists below the issue price, the loss and the interest both fall on you.

HNI or retail?

One PAN can apply as retail or as HNI in an IPO, not both: the registrar rejects both applications. Retail needs much less money and its odds are often similar or better, because the retail portion is larger. HNI makes sense mainly when the retail portion is far more oversubscribed than small HNI, and you have the funds to block for a few days.

IPO Khata shows each IPO's subscription by category, including small and big HNI, and the rough chance of allotment for each.

If several family members apply, the usual approach is to spread applications across separate PANs in retail rather than one large HNI bid, because each retail application is its own lottery ticket.

Related guides

More on how ipos work

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Information, not investment advice. GMP is an unofficial grey-market indicator; figures come from public sources (InvestorGain) and may be late or wrong. Not registered with or affiliated to SEBI, the exchanges, the registrars or InvestorGain.