What are retail investors in an IPO?

Retail investors in an IPO are individuals, NRIs, or HUFs who participate with smaller investments.

Common Features (Mainboard & SME IPOs):

• Eligible categories: Individuals, NRIs, HUFs.
• Reservation rules: Minimum 35% in book-building issues and 50% in fixed-price issues.
• Oversubscription allotment: Minimum bid lot subject to availability of shares and then proportionately for remaining shares.
• No lock-in period: Shares can be sold freely once listed.
• Bids can be withdrawn while the issue is still open

Key Differences (after SEBI’s revised SME rules effective 1 July 2025):

• Terminology: Mainboard investors are called Retail Individual Investors (RIIs), while in SME IPOs they are now termed as Individual Investors who applies for minimum application size.
• Investment limit: Mainboard RIIs can apply up to ₹2 lakhs; SME individual investors can apply only for 2 lots.
• Minimum application size: 1 lot in mainboard IPOs vs. 2 lots in SME IPOs.
• Cut-off bidding: Allowed for mainboard RIIs; not permitted in SME IPOs (investors must bid within the price band).