The Three Subscription Categories
Every Indian IPO has three investor categories, each with a reserved quota. Understanding how each subscribes gives you deep insight into an IPO's demand quality.
1. QIB — Qualified Institutional Buyers (50% quota)
QIBs include mutual funds, FPIs, banks, and insurance companies. They are considered the "smart money" in the IPO market. QIB bids mostly come on Day 3 — do not panic if QIB is low on Days 1 or 2.
2. NII / HNI — Non-Institutional Investors (15% quota)
NIIs include HNIs applying for ₹2 lakh or more. Very high NII numbers (100x–500x) often indicate leveraged bidding — HNIs take loans to apply, which can mean heavy selling pressure on listing day as they exit to repay.
3. Retail — Individual Investors (35% quota)
Retail investors apply up to ₹2 lakh. At 10x retail subscription, roughly 1 in 10 applicants gets allotment via the computerised lottery system.
What Subscription Patterns Tell You
- High QIB + High Retail: Broad-based demand — usually good listing prospects.
- High NII + Low QIB: Leveraged speculative demand — risky, may list flat or weak.
- Low All Categories: Weak demand — avoid or be very cautious.