4 Types of Investors in an IPO

1. Institutional Investors or Qualified Institutional Investors (QIIs)

Advantages of QIIs

• The time taken to complete the QII process is shorter compared to public issuance.
• Cost-effective since there’s no need for a large team of bankers, advocates, or auditors.
• Opportunity to buy large stakes, with flexibility to sell stocks after a 90-day lock-in period.

2. Non-Institutional Investors (NIIs) / High Net Worth Individuals (HNIs)

Advantages of NIIs

• Eligible to invest more than ₹2 lakhs in IPOs.
• Privileged to withdraw from the IPO before the date of allotment.

3. Retail Individual Investors (RIIs)

Advantages of RIIs

• Chance to invest in companies with strong future prospects from the very beginning.
• Opportunity to build significant wealth over time with good returns.
• Investment amount is capped at ₹2 lakhs, making it accessible to smaller investors.

4. Anchor Investors

Advantages of Anchor Investors

• Ability to apply for shares one day before the issue opens to the public.
• Their involvement boosts investor confidence and attracts public interest in the IPO.

How are Anchor Investors Different from QIIs?

• Eligible to bid one day before the IPO issue opens.
• Must apply for shares worth at least ₹10 crore.
• They are a subset of QIIs, drawing from the allocation reserved for QIIs.
• They have a 30-day lock-in period for their shares.