Can HNIs and Retail Investors Apply in the Same IPO

Initial Public Offerings (IPOs) allow companies to offer their shares to the public for the first time, and investors are categorised based on the value of their applications. Among these categories, High Net Worth Individuals (HNIs) and Retail Investors represent two distinct participant groups within the IPO framework.

Both High Net Worth Individuals (HNIs) and Retail Investors can apply in the same IPO. However, they do so under different application limits and allocation norms as defined by SEBI regulations. These rules establish clear distinctions in how each category participates in bidding and receives allotments.

Understanding the separate criteria for HNIs and retail investors provides clarity on how IPO participation is structured in the Indian market.

In IPOs, investors are categorised based on their bid value and participation structure, which helps determine how shares are allotted across different investor groups.

Retail Investors 

Retail investors apply for shares worth up to ₹2 lakhs in an IPO. This category is designed to facilitate broader access for individual market participants.

High Net Worth Individuals (HNIs)

HNIs apply for shares exceeding ₹2 lakhs in an IPO and fall under the Non-Institutional Investor (NII) segment. They operate with different bidding thresholds and allocation mechanisms compared to retail applicants.

These classifications follow SEBI’s public issue regulations.

Yes, both High Net Worth Individuals (HNIs) and Retail Investors can apply for the same IPO, but each must do so under the category that corresponds to their bid size as defined by SEBI

SEBI differentiates applications based on investment value to ensure that allotment and participation rules remain clear for each investor segment.

Important Points

• Categories are determined purely by the bid amount submitted in the IPO application

• The same PAN cannot be used to submit applications under both Retail and HNI categories

• Multiple applications from a single PAN across different categories may be rejected during verification

• Retail and HNI quotas are separate, and allotment procedures vary based on demand in each segment

While both categories participate in the same public issue, their eligibility criteria, investment thresholds, and allotment methods remain independently defined.

Although both categories participate through the same IPO platform, the application requirements differ based on the investment amount placed under each segment.

For Retail Investors

• Can apply through ASBA-enabled bank accounts or online platforms offered by brokers

• Bid value remains capped at up to ₹2 Lakhs

• Application funds remain blocked in the bank account until allotment confirmation

For High Net Worth Individuals (HNIs)

• Applications are placed under the Non-Institutional Investor (NII) category with a minimum amount above ₹2 Lakhs

• Funding may be arranged through ASBA or margin-based financing offered by intermediaries

• Allotment follows a proportionate method if the NII category receives more bids than available shares

These distinct mechanisms ensure each investor category participates within its respective framework set under IPO regulations.

Participation in IPOs follows structured rules laid out by the Securities and Exchange Board of India (SEBI), ensuring consistency in how different investor groups apply and receive allotment.

Key regulatory criteria include:

• The application value for retail investors remain within the ₹2 Lakh limit

• HNI bids are required to exceed ₹2 Lakhs and are placed under the Non-Institutional category

• All IPO applications must be submitted through the ASBA mechanism, where funds remain blocked until allotment results

• A single PAN cannot be used for multiple applications across categories in the same IPO

These regulatory distinctions maintain order in the subscription process and support category-wise allotment as per IPO guidelines.

Participation in an IPO differs based on the investment category and the structure of the bid. Several considerations are relevant while determining the type and value of the application.

Investment Capacity and Risk Appetite

Retail investors align their bids within the ₹2 Lakh limit, while HNIs commit higher amounts that may carry greater exposure based on market demand and subscription levels.

Application Strategy

Investors participate under the retail or NII category depending on the investment amount, and allotment mechanisms vary accordingly.

Understanding IPO Fundamentals

Reviewing company performance, financial disclosures such as the draft prospectus, and current equity market sentiment contributes to the decision-making process.

These factors outline how application choices align with the rules and expectations set for each investor segment.

Retail investors and High Net Worth Individuals (HNIs) can both participate in the same IPO, but each falls under a separate category defined by SEBI regulations. Differences in application amounts, allotment methods, and reserved quotas determine how each segment engages with a public issue. Recognising these structural distinctions provides a clearer view of how IPO participation works across investor types.

This content is for informational purposes only and the same should not be construed as investment advice. Bajaj Finserv Direct Limited shall not be liable or responsible for any investment decision that you may take based on this content.