IPO Categories: Retail, sHNI, bHNI, QIB Quotas Explained

Every mainboard IPO in India splits its shares into categories: qualified institutional buyers (QIB), non-institutional investors (NII, split into sHNI and bHNI), retail individual investors, and sometimes employee and shareholder reservations. As of October 2026, retail means bids up to ₹2 lakh, sHNI means above ₹2 lakh up to ₹10 lakh, and bHNI means above ₹10 lakh. Retail and NII shares in oversubscribed issues are allotted mainly by lottery at a minimum size, so your category decides both how much you must bid and how you are allotted.

The category quotas

SEBI's ICDR Regulations set the split of the net offer (the issue minus any reservations). It depends on the eligibility route the company uses.

The exact percentages for any issue are stated on the cover page and in "The Offer" section of its red herring prospectus. Our guide to reading the IPO offer document shows where.

Reservations on top of the net offer

• Employee reservation: for eligible employees, capped as a percentage of post-issue capital (up to 5%). An employee can bid up to ₹5 lakh, but allotment is initially limited to ₹2 lakh; amounts above that are allotted only if the employee portion is undersubscribed. Some issues offer employees a discount.
• Shareholder reservation: for shareholders of a listed promoter or group company, as on a record date stated in the RHP. It is limited to a small share of the issue. Shareholder-reservation bids up to ₹2 lakh can usually be made at cut-off.

Eligible employees and shareholders can generally bid in their reservation and in the retail or NII category, which can mean two chances. The RHP sets the conditions for each issue.

Retail, sHNI and bHNI limits

The sHNI and bHNI split and the lottery method came from SEBI's 2022 amendments to the ICDR Regulations, applicable from April 2022. Before that, NII allotment was fully proportionate, so very large bids took most of the shares. If either sub-category is undersubscribed, the unsubscribed part can be allotted to the other.

The minimum NII application size is the smallest number of lots that takes the bid above ₹2 lakh. That is the lot unit each successful NII applicant receives in the draw, whether they bid as sHNI or bHNI.

Worked example: lot maths

Suppose an issue has an upper price band of ₹285 and a lot size of 52 shares, so one lot costs 52 × ₹285 = ₹14,820.

So in this issue: retail is 1 to 13 lots, sHNI is 14 to 67 lots, and bHNI is 68 lots or more. The minimum NII application size is 14 lots (728 shares).

Allotment odds in the same issue (illustrative)

Assume the issue's portions, after reservations, are 49,000 lots for retail and 21,000 lots for NII.

What this shows:

• A retail bid of 13 lots has about the same chance as a bid of 1 lot. Each retail application is one ticket.
• An sHNI bidding 67 lots (₹9.93 lakh blocked) still receives only 14 lots if successful, about the same as one bidding 14 lots.
• A bHNI who wins the draw also gets 14 lots, not their full bid. Only if shares remain after every winner gets the minimum is the balance allotted proportionately.
• In real issues the odds differ by category depending on how many people apply, so check the official subscription data by category. A bigger block of money does not buy proportionately better odds.

You can follow subscription by category for current issues on our live IPO dashboard.

How retail allotment works step by step

1. The registrar rejects invalid bids (duplicate PANs, unapproved mandates, wrong details).
2. It works out how many applicants can get one minimum lot from the retail portion.
3. If valid applications exceed that number, a computerised lottery, approved by the designated stock exchange, picks winners.
4. If the portion is not oversubscribed, everyone gets their bid, and leftover shares are allotted proportionately.

You can then check the result as explained in how to check IPO allotment status.

Practical points

• Retail limits are checked at the upper band. A bid at cut-off is valued at the top of the price band, so work out your maximum lots at that price. Most apps stop you at the maximum retail lots.
• One application per PAN per category. Using family members' PANs is allowed only if the money and accounts are genuinely theirs; the UPI ID or bank account must be in each applicant's own name.
• UPI limit. Individuals can use UPI for bids up to ₹5 lakh. sHNI bids above ₹5 lakh and all bHNI bids go through net banking ASBA. See how to apply for an IPO online.
• Large NII blocks have a cost. Money blocked for a week earns nothing in your savings account unless your bank pays interest on blocked balances.
• Track the result over time. If you keep allotted shares, our CAGR calculator gives the annualised return.

This article is educational and does not recommend any IPO or bidding strategy.

Key takeaways

• The net offer is split among QIB, NII and retail; profitable companies give retail at least 35%, QIB-route companies at most 10%.
• Retail is up to ₹2 lakh, sHNI above ₹2 lakh to ₹10 lakh (one-third of NII), and bHNI above ₹10 lakh (two-thirds of NII).
• Oversubscribed retail portions give one lot per winner by lottery; NII winners get the minimum NII application size by lottery, with any balance proportionate.
• Only retail, employee and shareholder-reservation bidders can bid at cut-off.
• Employees can bid up to ₹5 lakh in their quota, with initial allotment up to ₹2 lakh.
• Work out lots at the upper band to know exactly which category your bid falls in.