The employee quota in an IPO
Many IPOs reserve a small part of the issue for the company's own employees, often at a discount to the issue price.
Who can apply
Eligible employees, and in some issues directors, of the company (and sometimes of its subsidiaries or promoter companies), as defined in the RHP, using their own PAN and demat account.
Limits and discount
An employee can bid up to ₹5 lakh in the employee category. Bids up to ₹2 lakh are considered first; amounts above that are allotted only if the employee portion is undersubscribed. Many issues offer employees a discount per share, stated in the RHP.
Applying in two categories
An employee can usually apply in the employee quota and also as a retail or HNI applicant, because the reservation is a separate category. Check the RHP: each issue states its own rules.
Recording it
IPO Khata records employee, shareholder and policyholder applications separately from retail, so each is checked and counted on its own.
Related guides
- The shareholder quota in an IPO
- IPO categories explained: retail, HNI (NII) and QIB
- How to improve your chances of an IPO allotment
More on how ipos work
- IPO lot size, price band and cut-off price explained
- SME IPO vs mainboard IPO: what is different
- Anchor investors in an IPO
- DRHP, RHP and prospectus: what to read before an IPO
- IPO lock-in periods explained
- What is the HNI category in an IPO?
See today’s IPOs with live GMP and subscription
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.