Who Are QIBs?

Role in IPOs

• Allocation Quota: Around 75% of the IPO shares (in a book-built issue) are typically reserved for QIBs.
• Price Discovery: These investors help in setting the IPO price through their bids during the book-building process.
• Confidence Booster: When QIBs show interest in an IPO, it’s often seen as a positive signal by retail and HNI investors.
• Lock-in Period: Unlike retail investors, QIBs have a 90-day lock-in period after allotment.

Investor Behavior

Who Are HNIs?

High Net-Worth Individuals are investors who bid above a certain threshold—usually above ?200,000 (?2 lakh) per IPO application in India. They’re substantial private investors, but not as large or institutional as QIBs.

Role in IPOs

• Allocation: Typically around 15% of the IPO is set aside for HNIs.
• Block Bidding: Like QIBs, HNIs often bid in block lots (big quantities), which can influence the allotment process. They're clubbed separately from smaller retail applicants.

Objectives & Behavior

• HNIs are often opportunistic, aiming for high post-listing gains in relatively short timeframes.
• They balance between institutional-level strategy and faster liquidity orientation.

Who Are Retail Investors?

Who Are Anchor Investors?

These are high-profile institutional investors—mutual funds, sovereign wealth funds, big financial institutions—who are offered shares a day before the public IPO opens.

Role in IPOs

• Allocation: Typically around 10% of the QIB portion (i.e., 7.5% of the total issue) is set aside for them.
• Pricing: Anchor investors get shares at the IPO’s indicative price band, fixed 1 day prior.
• Signaling Effect: Their participation is a strategic move by issuers to build credibility and demand. Knowing that big, reputable institutions are backing the IPO reassures retail and other investors.

Objectives & Behavior

• Anchor bids are usually large and lock in for a 30-day period post-listing—so they’re in for visibility, governance assurance, and steady investor sentiment.

Allocation Odds

• • QIBs and Anchor categories are heavily institutionalized—access is limited to big players.
  • As a retail investor, you typically compete for a smaller quota (~10%), but it's completely open to all individual investors via brokers.

Pricing Dynamics

• • QIB bids shape the price band; strong demand there can raise it.
  • Anchor participation reassures and often stabilizes price expectations.
  • HNI and retail investors rely more on these signals—but often pay the final IPO price (based on book-building results).

Listing Behavior

• • IPOs with strong QIB and Anchor subscription often list with smaller price volatility.
  • Retail-heavy IPOs, especially those hyped on social media, may see sharp listing pops or dips—greater risk and reward.

Application Simplicity

• • If you’re retail, applying is straightforward through your de-mat account or broker portal.
  • No need for institutional vetting—just the usual KYC and funding.

• QIBs bring stability and professional evaluation.
• HNIs drive high-value interest and often apply aggressively.
• Retail investors represent the broader public, with simplified access.
• Anchor investors act as early signals of trust and potential.

Ready to Invest?

With Arham Wealth, applying for IPOs is seamless—whether you're a first-time investor or a market veteran. Their platform ensures a simple, guided, and efficient experience for everyone. Already interested in IPOs? It might be the right time to open a Demat account and explore how IPOs can fit into your portfolio diversification strategy.