What the cut-off price means in an IPO
IPOs in India are mostly book-built: you bid within a price band, and the final price is fixed after bidding. The cut-off option is how small investors avoid guessing that price.
What it means
Bidding at cut-off means you agree to buy at whatever final price is set. The amount blocked is calculated at the top of the price band. If the final price is lower, the difference is unblocked.
Almost every book-built IPO in India is priced at the top of the band, so a cut-off bid and a bid at the upper price usually end up the same.
Who can use it
Retail investors can bid at cut-off, as can employee and shareholder quota bids up to ₹2 lakh. HNI (NII) and QIB investors cannot; they must bid at a specific price.
Why it matters
A bid below the final price is not considered for allotment at all. Ticking cut-off removes that risk, which is why most broker apps select it by default for retail bids.
Related guides
- IPO lot size, price band and cut-off price explained
- How to improve your chances of an IPO allotment
- How to apply for an IPO in India
- What is book building in an IPO?
More on applying for an ipo
- Can family members apply for the same IPO separately?
- The IPO UPI mandate, explained
- How to modify or cancel an IPO bid
- Applying for an IPO through net banking (ASBA)
- When to apply for an IPO
- Pre-applying for an IPO
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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.