How to Apply IPO in HNI Category – Rules & Process

HNI in IPO refers to High-Net-Worth Individuals who invest more than Rs 2 lakh in a public issue. These investors fall under the Non-Institutional Investor (NII) category and follow different rules and processes compared to retail investors.
This difference is also reflected in the IPO application process. In this article, we discuss what HNI in IPO means, how to apply IPO in HNI category, along with the rules, allotment process, and more. So let’s dive in!

What is HNI in IPO

HNIs are a special investor category that refers to the participation of High Net-Worth Individuals (HNIs) in an Initial Public Offering (IPO). In the context of Indian IPOs, an HNI is defined as a non-institutional investor who invests a minimum of Rs. 2,00,000 in an IPO application. This category includes individuals, Hindu Undivided Families (HUFs), NRIs, FPIs, trusts, and companies who wish to invest more than Rs. 2 lakh in a public issue

• As per SEBI guidelines, 15% of the IPO issue size is reserved for the Non-Institutional Investor (NII) category, which includes HNIs.

• HNIs must specify their bid price while applying; they cannot opt for the cutoff price.

• In case of oversubscription, shares are allotted on a proportionate basis (not via lottery like in the retail category).

• There is no maximum investment limit for applicants in the HNI category.

• This category allows for larger application amounts and potentially higher share allotments compared to the retail investor segment.

How to Apply IPO in HNI Category

Now that you understand who HNIs are in IPO, let’s go through the step-by-step process to apply for an IPO in the HNI category.

1. Log in to Your Rupeezy Account

Access your Rupeezy account via the web platform or trading app with the help of the registered, valid credentials.

2. Go to the IPO Section

Once logged in, head to the IPO section where you can view all active and upcoming IPOs available for application.

3. Choose the IPO to Apply for

Select the IPO from the list of open offers that you are interested in.

4. Select HNI Category

While filling out the application form, choose the HNI (High Net-worth Individual) category. This is mandatory for applying above Rs. 2 lakh.

5. Enter the Number of Lots and Bid Price

Specify the number of lots you wish to apply for. Enter your bid price as per the IPO’s price band.

6. Choose Your Payment Method

For applications up to Rs. 5,00,000, you can pay using your registered UPI ID.

For amounts exceeding Rs. 5,00,000, use ASBA via net banking. Ensure your bank is ASBA-enabled and sufficient funds are available.

7. Review and Apply

Click on “Apply” to review your bid details. Please note that HNI applications cannot be modified or withdrawn after submission.

8. Final Confirmation

Click on “Confirm” to submit your application. Your bid is now placed successfully.

9. Wait for Allotment Update

Once the IPO allotment process is complete, you’ll be notified via SMS/email whether shares have been allotted to you.

Benefits of HNI in IPO

Many people see IPO as a great starting point to enter the stock market, and there is no doubt about it. But there are a few reasons that make the HNI IPO better. So, to understand this better, here are the benefits of HNI in IPO:

1. Higher Allotment Chances

Applying as an HNI increases your chances of getting more shares compared to retail investors. This is because a larger portion of shares is reserved for HNIs, and allotment is often done proportionately based on your investment size.

2. Potential for Higher Returns

HNIs can invest larger amounts, so if the IPO performs well, the gains can be substantial. A bigger allotment allows for higher listing gains and more significant long-term profits if the company’s stock appreciates after listing.

3. Reserved Quota

SEBI regulations reserve 15% of IPO shares for the HNI category. This dedicated quota means HNIs have access to a significant portion of the IPO, which is not available to retail investors, improving their overall allotment prospects.

4. Investment Diversification

Participating in IPOs as an HNI allows investors to diversify their portfolios. By investing in new and potentially high-growth companies, HNIs can spread their risk and reduce reliance on existing holdings.

5. Participation in Anchor Investments

HNIs may have the opportunity to participate as anchor investors. This means they can secure shares before the IPO opens to the general public, sometimes at favorable terms, and gain early exposure to promising companies.

6. Larger Investment Flexibility

There is no upper limit on the amount HNIs can invest in an IPO. This flexibility allows them to apply for as many shares as they want, tailoring their investment to their financial strategy and goals.

7. Early Access to Application

HNIs can sometimes apply for IPO shares one or two days before retail investors during a special bidding window. This early access can increase their chances of receiving a favorable allotment in popular IPOs.

HNI IPO Rules

When you apply for IPO in the HNI category, it is not a confirmation of allotment. There are certain HNI IPO allotment rules that must be fulfilled first. These ensure that the allotment is done in the most appropriate manner without fail. So, here are the rules that you must be aware of:

• To be considered an HNI, you must apply for shares worth more than Rs. 2,00,000 in a single IPO application.

• SEBI reserves 15% of the total IPO shares for the Non-Institutional Investor (NII) category, which includes HNIs.

• HNIs must specify a bid price within the IPO’s price band; they cannot select the cut-off price option.

• Allotment to HNIs is done on a proportionate basis, so the more you apply for, the higher your chances of getting shares.

• In case of heavy oversubscription, a lottery system may be used to ensure fair allotment.

• Applications must be submitted before the NII category cut-off time, usually 4 PM IST on the closing day.

• Both Indian residents and NRIs can apply as HNIs if they meet the minimum investment and account requirements.

• There is no maximum investment limit for HNIs in an IPO.

• HNIs are not eligible for any discount on the IPO price.

• Shares are typically allotted within six working days after the IPO closes; if not allotted, the blocked funds are released.

• If the application amount is blocked from a savings account, interest continues to be earned until the process is complete.

• The HNI category is divided into S-HNI (Rs. 2 lakh to Rs. 10 lakh) and B-HNI (above Rs. 10 lakh) for subscription tracking.

• Applying as an HNI does not guarantee allotment; it depends on oversubscription and the size of your application.

HNI IPO Allotment Process

Once you have applied for the IPO, the next stage that you must look forward to is allotment. Now, the HNI IPO allotment process is a systematic process. The steps followed are as follows:

1. Application Data Collection

Once the application phase is complete, the registrar collects all the data, including the HNI IPO applications, for processing.

2. Validation of Applications

It starts with application checking. The points considered are:

• Data correctness

• Complete application forms

• Value above Rs. 2 lakh

Those that do not fulfill these conditions are rejected.

3. Calculating Demand

It's time to separate the applications into categories. This helps create the lot size and calculate the actual demand.

4. Allotment Planning

Now, it's time to make allotment decisions.

• Undersubscribed - All get allotted.

• Over-subscribed - Allotment on a proportionate basis.

• Highly Over-subscribed - Lottery system applied to ensure minimum allotment to eligible applicants.

5. Making Allotment

Based on the condition, the registrar finalizes the allotment terms. This is then published to ensure every applicant knows.

6. Notification and Settlement

If you are allotted shares, you will get a message confirmation. The amount will be finally debited, and shares will be transferred to your account.

7. Refund of Unutilized Funds

If you are not allotted or partially allotted, the difference amount will be refunded to your account.

This process ensures transparency and fairness in the HNI IPO allotment, following SEBI and exchange guidelines.

Difference Between Retail and HNI in IPO

Here is the difference between retail and HNI in IPO  based on eligibility, application limits, allotment rules, and more.

Small HNI vs Big HNI in IPO

1. Small HNI (sHNI)

These are investors who apply for shares worth more than Rs. 2 lakh but up to Rs. 10 lakh in an IPO. SEBI has reserved one-third of the total NII (HNI) quota for this group. Allotment is done proportionately based on the application size and overall demand in the SHNI segment. This category allows mid-sized investors to compete fairly for IPO shares, even in heavily subscribed issues.

2. Big HNI (bHNI)

This is an investor who applies for shares worth more than Rs. 10 lakh in an IPO. Two-thirds of the total NII (HNI) quota is reserved for this group. Allotment is also proportionate, and larger applications generally receive more shares, especially when demand is high. This category is for high-value investors seeking larger allocations and potentially greater gains from IPO participation.

To have a better clarification, here is a quick difference between the two:

Conclusion

Applying in the HNI category can be a smart strategy if you’re planning a higher investment in IPOs. With a reserved quota, proportionate allotment, and flexibility in investment size, the HNI route opens up better chances of share allocation, especially in high-demand IPOs. 

However, it's crucial to follow the rules carefully, bid above Rs. 2 lakh, use ASBA for large applications, and ensure your bid details are accurate.

Whether you fall under Small HNI or Big HNI, your IPO success will depend on market demand and timely, correct application. Platforms like Rupeezy make the process smooth and efficient, helping you apply confidently with all the right steps in place.

FAQs

Q1. Who is HNI in  IPO?

In an IPO, HNI refers to high-net-worth individuals under the Non-Institutional Investor (NII) category. This category includes resident Indians, NRIs, HUFs, companies, and trusts applying for IPO shares worth more than Rs. 2 lakh.

Q2. What is the full form of HNI in IPO?

The full form of HNI in IPO is High Net-Worth Individual.

Q3. Is it better to apply for IPO in the HNI category?

Yes, since there is a 15% reserve for this category, the chances of allotment increase.

Q4. Can I sell HNI IPO on the listing day?

Yes, once you get the shares allotted, you can sell them even on the listing day. 

Q5. Who are HNIs in India?

In the context of IPOs, HNIs are individuals or entities investing more than Rs. 2 lakh in a single IPO application. In general, any person with a net worth of Rs. 5 crore or more is called an HNI.

Q6. What is Big HNI in IPO?

A Big HNI invests Rs. 10 lakh or more in an IPO. SEBI reserves two-thirds of the HNI quota for them, which further increases allotment chances.

Q7. Which category is Better for IPO, Retail, or HNI?

Retail is simpler and allows cut-off price bidding, but due to high demand, it has limited allotment chances. HNI offers proportionate allotment and higher flexibility in investment size, making it better suited for serious investors seeking more shares.

Q8. What are the chances of IPO allotment in the HNI category?

The chances of IPO allotment in the HNI category are generally higher than in the retail category, as allotment is done on a proportionate basis.