HNI stands for High Net-worth Individual. An IPO in the HNI category is one in which you must apply for more than Rs 2 lakh. The HNI IPO is part of the NII (Non-Institutional Investor) reserved share of the IPO for allotment. According to Indian IPO requirements, a minimum of 15% of the public offering must be kept for NII investors.
If you apply for IPO shares in the HNI category, you can get shares worth more than Rs 2 lakhs. It also enhances the likelihood of retail investors being allotted. An investor can generate revenue in just seven days thanks to the cheap IPO funding available in the market. For each IPO, the majority of HNI investors take out a loan of hundreds of crores.
Rules for HNI IPO
1. For HNIs, the minimum IPO application amount is Rs 2 lakhs.
2. Based on your application and NII over-subscription, HNI Allotment is done on a proportionate or lottery basis.
3. Within six working days of the Bid/Offer Closing Date, IPO shares are distributed.
4. On the issue closing day, applications for IPO shares in the NII category must be submitted by 4 p.m. IST.
5. Banks prohibit the bid amount for HNIs in the same way they do for retail applications. If you apply from a savings bank account, the interest earnings on the blocked amount will remain.
6. The number of Equity Shares in the specified lots must not exceed the size of the Offer to be considered a Maximum Bid by NII (excluding the Qualified Institutional Bidders Portion)
7. NRIs applying for more than Rs 200,000 fall into the HNI/NII category.
8. Bidding at the Cut-off Price is not permitted for HNIs. They must bid in the issue price range at a fixed price.
9. Non-Institutional Portion must account for at least 15% of the Offer.
10. Only NII bids that are at or above the Offer Price are considered for allotment.
You must bid for more than Rs 2 lakh in equity shares to invest in the HNI category of an IPO. Only ASBA's (Applications Supported by Blocked Amount) Net banking facility or the physical IPO application form can be used to bid for the HNI IPO application. HNIs are not eligible to apply for most discount stock brokers' UPI-based IPO applications.
How to Apply for IPO under the HNI category?
1. Log in to your online banking account first.
2. In the IPO tab, select "IPO application."
3. This will lead you to the IPO system's online version.
4. There, investors must select the HNI category. Then, enter the number of lots you want to bid on and the price you want to pay. The entire sum should be in excess of Rs 2 lakhs.
5. The HNI is unable to select the cut-off price. A block mandate is created in the account at the highest bid price. You will block the amount of the application until the final allotment if you do this.
6. Only after the allotment of shares will the account be debited.
7. In the event of an IPO oversubscription, only a portion of the shares will be allocated. The account will be debited in accordance with the allocation.