HNI in IPO: A Complete Guide to Applying, Benefits, and Rules for High-Net-Worth Investors

• HNI IPO Investment FAQs

India’s wealth landscape is booming, with the number of ultra-high-net-worth individuals (UHNIs) projected to surge by 50% by 2028, per Knight Frank’s *The Wealth Report 2024*. This growth is fueling increased IPO participation by High-Net-Worth Individuals (HNIs), who enjoy unique advantages like higher allotment chances and diversification opportunities. But how exactly does the HNI category work in IPOs? This guide breaks down everything—from eligibility and application steps to benefits, rules, and pro tips—to help HNIs navigate IPO investments confidently. --- ### What is the HNI Category in IPO? High-Net-Worth Individuals (HNIs) are investors with a net worth of at least ₹5 crores. They fall under the Non-Institutional Investor (NII) category in IPOs, alongside NRIs, trusts, and corporations. SEBI mandates that 15% of IPO shares are reserved for NIIs, with HNIs required to bid a minimum of ₹2 lakhs—far above the retail investor cap. Key distinctions: - Eligibility: ₹5 crore+ net worth. - Allocation: 15% of IPO shares for NIIs. - Minimum bid: ₹2 lakhs (vs. ₹2 lakhs cap for retail). --- ### How to Apply for an IPO in the HNI Category? Applying as an HNI involves a few critical steps: 1. Check eligibility and ensure you have an active Demat account. 2. Log in to net banking , navigate to the ASBA/IPO section. 3. Select ‘HNI’ as your investor category. 4. Enter bid details : IPO name, lot size, and price (must total ≥₹2 lakhs). 5. Submit and wait : Funds are blocked until allotment; shares credited post-allotment. Pro tip: For bids over ₹5 lakhs, use ASBA via net banking/UPI or submit a physical form. --- ### Benefits of Investing in the HNI Category Why do HNIs dominate IPO subscriptions? Here’s why: 1. Higher allotment chances : Proportional allotment often favors larger bids. 2. Greater returns potential : More shares = higher gains if the IPO pops. 3. Diversification : Access to high-growth startups pre-listing. 4. Anchor investor perks : Early access at discounted rates. Example: In the 2023 Tata Tech IPO, HNIs secured 2x more shares than retail investors due to oversubscription. --- ### Rules HNIs Must Follow - Single-category bidding : Can’t apply as both retail and HNI. - No cut-off bids : Must bid within the price band. - No withdrawals : Bids are binding; no post-submission reductions. - Deadline : Applications close by 4 PM IST on the issue’s last day. Note: Funds remain blocked but earn interest until allotment. --- ### 5 Expert Tips for HNI IPO Investors 1. Study the RHP : Scrutinize the *Red Herring Prospectus* for financial health. 2. Track IPO trends : Follow SEBI updates and market calendars. 3. Consult experts : BTCC analysts recommend balancing IPO bets with blue-chip stocks. 4. Diversify : Allocate only 10–15% of your portfolio to IPOs. 5. Monitor post-listing : Exit or hold based on performance metrics. Data source: TradingView charts for historical IPO performance. --- ### FAQs

HNI IPO Investment FAQs

Can HNIs sell shares on the listing day?

Yes! Unlike anchor investors locked in for 30 days, HNIs can sell immediately post-listing to capitalize on gains.

Is PAN mandatory for HNI applications?

Absolutely. PAN-linked Demat and bank accounts are compulsory for IPO bids.

How is allotment calculated for oversubscribed IPOs?

SEBI uses a lottery system or proportional allocation (e.g., 10% of applied shares if oversubscribed 10x).