How are shares allotted in the HNI category of IPO?

Understanding how shares are allotted in the HNI IPO category is important for anyone applying with a larger amount. Unlike the retail category, the HNI segment (often part of the non institutional quota) follows a proportionate system, and this creates a different experience when compared with the lottery style method used for smaller bids.

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The HNI allotment rules in IPO revolve around the size of your application relative to overall demand. Once the bidding window closes, all HNI applications are grouped, and the total subscription level is calculated. If the category is not heavily subscribed, allotment is straightforward and proportionate. Each applicant receives shares in line with how much they have applied for. However, when this category attracts heavy demand, allocation becomes more competitive. Larger applications stand a better chance of receiving shares because of the proportionate structure.

To understand the process of share allocation for HNI investors, imagine the registrar dividing available lots proportionately among bidders. For example, if the category is oversubscribed by a certain multiple, each HNI applicant receives a fraction of what they applied for, based on the subscription ratio. If the subscription is extraordinarily high, some smaller HNI applicants may not receive allotment at all, simply because the proportionate share rounds down to zero.

Another factor worth noting is that HNI applicants must ensure their application details are accurate. Any mismatch in PAN, demat account, or payment can lead to rejection. Since the category involves larger amounts, the verification process is strict and detailed.

The overall system prioritises fairness while recognising that HNI applications vary widely in size. Once the allotment is finalised, shares are credited to successful applicants, and funds are unblocked for others. Understanding this structure helps investors form realistic expectations when bidding in this higher category segment.