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- Bids can be withdrawn while the issue is still open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).
