Non Institutional Investors

When a company goes public through an Initial Public Offering (IPO), it sells shares to the public for the first time. Investors can buy these shares by applying for them. To make this process easier, investors are grouped based on how much they want to invest. One of these groups is called Non-Institutional Investors (NII). In this article, we will explain what Non-Institutional Investors are, their role in an IPO, their key features, and the rules that apply to them. 

What are Non-Institutional Investors?

The Non-Institutional Investor meaning refers to individuals or entities that apply for more than ₹2 lakhs worth of shares in an IPO. SEBI divides NIIs into two categories: small NII (sNII) and big NII (bNII). Below is a breakdown of each type:

Small NII

These are investors who apply for shares worth more than ₹2 lakhs but less than ₹10 lakhs. About one-third of the shares reserved for Non-Institutional Investors in an IPO are set aside for small NIIs.

Large NII

These are investors who apply for shares worth more than ₹10 lakhs. The remaining two-thirds of the shares reserved for Non-Institutional Investors are set aside for big NIIs.
 

Non-Institutional Investors Example

Mr. ABC is a wealthy individual with assets worth several crores. He invests in the stock market, real estate, and private equity. As a non-institutional investor, he uses a combination of his research and advice from financial experts to make informed investment decisions.

Similarly, the “XYZ Family Trust” manages the wealth of a family and decides to invest in a promising tech start-up. Although it is not a formal financial institution, the trust has enough resources to make large investments.

Types of Investors in Stock Market

The stock market has different types of investors, each playing a unique role:

Retail Investors

These are individual people who buy and sell stocks for themselves. They usually have less money to invest and don't have access to the same tools or information as bigger investors.

Institutional Investors

These include large organizations like mutual funds, pension funds, and insurance companies. They manage a lot of money and have more influence on the market. They also have access to better technology and research.

High-Net-Worth Individuals (HNIs)

These are people with a lot of money to invest. They can get special services and lower fees, and their investments can be big enough to affect the market.

Non-Institutional Investors (NIIs)

This group includes wealthy individuals, family offices, and smaller organizations. They may also invest large amounts and sometimes get access to investment opportunities that regular investors don’t.
 

Difference between Non-Institutional Investors and Retail Investors

Non-Institutional Investors and Retail Investors mainly differ in the size of their investments and the types of opportunities they can access. Non Institutional Investors usually invest larger amounts and might have access to more advanced investment options, while Retail Investors typically invest smaller personal amounts and usually stick to common, publicly available investment products. 

Below is a simple comparison table to explain the differences:
 

Conclusion

To invest in upcoming IPOs, you need an active demat account. If you don’t have one, you can easily open it on the BlinkX website or application. The process is quick, paperless, and can be done online in just a few minutes. You can open both a demat and a trading account for free. So, don’t wait—start your investment journey today!