An NII in an IPO| Initial Public Offering is shortened to “IPO.” An Initial Public Offering is when a private company gives shares to the general public for the first time. When a company starts to do business, certain people, like the owners, angel investors, and others, may own shares of the company.
When a business wants to grow or grow bigger, it needs to raise money. So, it has an initial public offering (IPO) of its shares and then gets listed on the stock exchange. Many investors sign up for IPOs, and you need to know what NII means in an IPO if you want to invest.
How an IPO Works
Before you look up what NII means in an IPO, you should know how an IPO works in general. If you have ever invested in the stock market and had to open a demat account, you may already know something about an initial public offering (IPO).
When a private company offers an IPO to the public, investors from the public can choose to be given shares of the company. Institutional and individual investors can choose how many shares they want to buy, but it is up to the company to give out a certain number.
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An NII in an IPO
Do you want to sign up for an initial public offering (IPO)? Then you should probably find out what an NII is. “NII” stands for “individual investor” or “individual bidder.”
When a person signs up for an IPO for an allotment of shares in a company, they are basically making a bid for those shares, since it is up to the company to give them out. So, people who buy shares worth more than Rs. 2 Lakhs in an IPO are called NII, which stands for “non-institutional investors.”
NIIs in an IPO:
In an IPO, what is an NII? You can call an NII a “who” or a “what,” since it can stand for a number of things. The following are all examples of NIIs:
- Indian individual residents
- HUFs
- NRIs
- HNIs
- Any trusts, societies, or companies that bid on more than Rs. 2 Lakhs worth of shares
What an NII Category Has
An NII is a non-institutional bidder in an initial public offering.
- 15% of the offer is set aside for NIIs in any IPO.
- NIIs can pull their bids up until the date of allotment. NIIs can’t put in bids at cut-off prices.
- NIIs don’t have to sign up with the Securities and Exchange Board of India, but they can if they want to (SEBI)
- There are two types of NIIs:
- sNII (bidders who offered less than Rs. 10 Lakhs)
- bNII (those that bid over Rs. 10 Lakhs)
In both of the above subcategories, if an IPO doesn’t have more people who want to buy shares than there are shares available, all of the shares in that subcategory are offered.
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