Can I bid more than the cutoff price in the IPO?

If you’ve ever applied for an IPO, you’ve probably come across the term cut off price. It’s a phrase that often confuses new investors, especially when they wonder whether they can bid above it. Let’s clear that up with the bidding above the cutoff price in IPO explained in simple, practical language.

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When companies issue shares through the book-building process, they set a price range, for example, ₹120 to ₹130 per share. Investors are free to bid for shares at any price within that band. Once the bidding period closes, the company and its merchant bankers analyse all bids and decide the final issue price, this is known as the cut off price. It’s the price at which the maximum number of shares can be allotted based on total demand.

Now, to answer the key question, can investors bid higher than the cutoff price in an IPO? Technically, you can only bid within the declared price band. That means if the upper end is ₹130, you cannot bid more than that. The cut-off price will always fall within the band, never beyond it. If you bid below the cut off price, your chances of allotment decrease. If you bid at or above the cut-off price, you stand a better chance of receiving shares.

For retail investors, there’s an even simpler option, selecting “Cut off” while filling the IPO form. This means you’re willing to buy shares at whatever final price is discovered. It’s a convenient way to ensure you don’t miss out due to a small pricing difference. On the other hand, if you enter a specific price manually and it turns out to be lower than the cut-off, your bid might get rejected during allotment.

Understanding IPO cutoff price meaning for investors is crucial because it directly affects your allotment outcome. The cut off ensures fairness, those willing to pay the most get priority, while the final price reflects genuine market demand.

In short, you can’t bid above the upper price limit set by the company, but you can always bid at the highest price or choose the “cut off” option. It’s a smarter move for retail investors who want to maximise their allotment chances without overcomplicating the process.