What is NII in IPO?

In the investment domain, Non-Institutional Investors (NIIs) consist of wealthy individuals, private enterprises, and trusts. Unlike larger institutional entities, NIIs in IPOs get more flexibility, enabling them to route the market swiftly. With fewer regulatory limitations, they can seize market prospects with remarkable agility. In this blog, explore the NII category in IPOs, examining their unique personas, investment tactics, and significance in the IPO process.  

Understand the concept of NII

The non-institutional investors in IPOs constitute a diverse category of investors unaffiliated with institutional entities. This cluster comprises individuals possessing substantial assets, family enterprises with investment portfolios, and private investor collectives. What sets NIIs apart from institutional investors is their tailored approach, leveraging both financial resources and individual preferences to craft portfolios blending with traditional and alternative investments.
Furthermore, certain NIIs may have a favourable investment opportunities, accessing opportunities like venture capital or private equity typically reserved for wealthy investors. Their investment strategies are often intricate, including securities such as bonds and stocks, alongside unconventional assets like work pieces of art or private businesses. NIIs in IPOs diversify their portfolio across numerous investments to mitigate risks and potentially enhance long-term returns. 

Table of Content

1. Understand the concept of NII
2. Categories of NIIs in IPO
3. Features of an NII Category

Categories of NIIs in IPO

These are the categories of NII in IPO:

1. Indian Individual Residents: 
   These people are the residents of India, who are in a position to apply for shares-in-demand in India as set by the issuer. 
2. HUFs (Hindu Undivided Families): 
   These are the families governed by Hindu law, possessing the legal entity status and are eligible to invest in IPOs.
3. NRIs (Non-Resident Indians): 
   NRIs (Non-Resident Indians) are individuals holding foreign citizenship alongside Indian passports. They possess eligibility to invest in Indian IPOs, although subject to specific laws and regulations.
4. HNIs (High Net Worth Individuals): 
   HNIs, or High Net Worth Individuals, are individuals actively engaged in significant asset investment and also fulfill the criteria to participate in Initial Public Offerings (IPOs).
5. Trusts, Societies, or Companies: 
   These are entities like trusts, societies, or companies that bid for shares worth more than Rs. 2 Lakhs in an IPO.

Features of an NII Category

The following are the features of an NII in the IPO category:

Conclusion
The involvement of NII in the IPO market is regarded as crucial. Their contribution to IPO financing and enlargement of market depth is quite substantial. Their participation in the investor pool not only attains this diversity but also enhances the liquidity and valuation of the company in the public domain. Try the stock market app for hassle-free participation in IPOs.