HNI

HNI (High Net-Worth Individual) in the context of Indian IPOs refers to investors who apply for shares worth more than ₹2,00,000. SEBI formally calls this the Non-Institutional Investor (NII) category, but the market universally uses the term HNI.

In every IPO on the NSE and BSE, SEBI mandates that the issue be split into three main categories: Retail Individual Investors (RII) who apply for up to ₹2 lakh, Non-Institutional Investors (HNI/NII) who apply for above ₹2 lakh, and Qualified Institutional Buyers (QIBs) such as mutual funds and insurance companies. The NII category typically receives 15% of the total issue size.

The HNI category is further subdivided: small HNI (sHNI) applies for ₹2-10 lakh, while big HNI (bHNI) applies for above ₹10 lakh. In heavily Oversubscriptioned IPOs, the allotment method differs - sHNI allotment is lottery-based (like retail), while bHNI allotment is proportional.

For example, in an IPO subscribed 50x in the HNI category, an sHNI application of ₹5,00,000 is entered into a draw where each winning applicant gets the minimum lot. A bHNI applying ₹50,00,000 in the same IPO receives shares proportional to the application amount relative to total bHNI demand.

HNI applications require full upfront payment or equivalent margin blocked via ASBA (Application Supported by Blocked Amount). The funds remain blocked in the applicant's bank account until allotment, and are unblocked within 4-5 days if no shares are allotted.