What a QIB is in an IPO, and why that book fills last

Who counts as a QIB

SEBI's Issue of Capital and Disclosure Requirements Regulations, 2018 sets the class out in its definitions. QIB status is a list of registered institutions rather than a size of cheque. The list runs:

• Mutual funds, venture capital funds and alternative investment funds registered with SEBI.
• Foreign portfolio investors, except individuals, corporate bodies and family offices.
• Public financial institutions, scheduled commercial banks, and multilateral or bilateral development financial institutions.
• Insurance companies registered with the Insurance Regulatory and Development Authority of India.
• Provident or pension funds carrying a minimum corpus of 25 crore rupees.

A person applying through an ordinary demat account is a retail or non-institutional bidder instead, however large the cheque. QIB status runs with the entity that registered for it, and stays with that entity across every issue it bids on.

How a book built offer is split between QIB, NII and retail

Every book built IPO in India divides the offer three ways before a single share changes hands. QIBs get at least 50 percent. Non-institutional bidders, those applying above 2 lakh rupees, get at least 15 percent. Retail bidders applying up to that limit get the remaining 35 percent at minimum.

Inside the QIB portion sits a further carve out for anchor investors, institutions that commit a day before the issue opens to the public. An anchor investor's application must run to at least 10 crore rupees. A SEBI amendment that took effect on 30 November 2025 raised the share of the QIB book anchors can take to 40 percent, up from 33 percent before that date. Of that 40 percent, 33 percent is reserved for mutual funds and 7 percent for insurers and pension funds. Half an anchor's allotted shares stay locked for 30 days after allotment. The other half stays locked for 90 days. The earliest institutional money into an issue is also the slowest to leave it.

Why the QIB book fills last

Two structural facts explain the shape of the table before a single number is checked.

An institutional bid cannot be revised down

A retail or NII bidder can raise a bid up to the closing hour with little consequence. A QIB bid works differently once it is placed inside the price band. It can be revised upward, or withdrawn under narrow, rule bound conditions, but simple downward revision is off the table. An institution that commits on day one is locking in that number for the rest of the issue. Most wait until they have seen enough of the book to be sure.

The public number mostly confirms a private one

Book running lead managers rarely take an issue to the public without a strong read on institutional appetite already in hand. Ambareesh Baliga, an independent market analyst, made this point to Business Standard on 9 October 2025. Merchant bankers, he said, typically line up informal commitments running one and a half to two times the offer size before an issue even opens. That cushion exists so the book survives if some of the early interest later cools. The subscription multiple that shows up over the final hours mostly restates interest the lead managers already expected to see.

A QIB column reading near empty on day one describes how that category behaves. Institutions in it confirm late, and the structure around them is built for that.

What the subscription table does and does not tell you

A subscription multiple is bids received divided by shares reserved for that category. That is all it measures. It says nothing about where a stock will list, because a bid is a commitment to buy at a fixed price band. It is not a forecast of where the market will price the stock once trading opens freely. Retail's 35 percent stays a fixed reservation whether that category runs thin or crowded. A low retail multiple next to a high QIB one describes two pools filling on two different timelines. It is not evidence that ordinary investors read the company better than institutions did.

How pro-rata allotment works, and what basis of allotment means

QIB and NII shares are allotted pro-rata, proportional to the size of the bid against the shares reserved for that category. Say a QIB portion is subscribed twelve times over. An institution that bid for shares worth 120 crore rupees against a 10 crore rupee reservation receives close to one twelfth of what it asked for. The same fraction applies across every institutional bidder in that book.

Retail works on a different rule. When the retail category is oversubscribed, allotment runs by a computerised lottery. Each eligible application gets an equal chance at one lot, rather than a shrinking fraction of a larger bid. Basis of allotment is the document the issue's registrar publishes once bidding closes. It shows exactly how the shares in each category were divided among the bids received, filed with the exchanges as a public record.

What this means for someone investing on a schedule

None of this is a rule to act on. A subscription table tells you how a queue filled. It says nothing about what anything is worth, and nothing about a listing price or a return. Qatobit's own crypto indices run on a different clock. They follow a published methodology, rebalanced monthly, on a schedule that holds regardless of how any single day's book fills in an unrelated market.

A QIB is a class of registered institution, defined by regulation rather than by the size of a bid. Its book fills last because the rules and the incentives both point that way. A thin or crowded column two days before the close describes timing. It does not describe the offer itself.

The QIB portion sits inside a wider structure worth knowing end to end. What an offer for sale means for the person buying the IPO covers the other common structure. There an existing holder sells the shares, rather than the company issuing new ones. NSE's pre-open auction and a market that never closes covers what happens to a stock in the minutes before it starts trading each day. Investing versus trading, the two job descriptions separates a position held on a thesis from a bet on the next few days. And what a crypto index actually is carries the same idea, a schedule and a published rule, into a different asset class.

Frequently asked questions

What is QIB in an IPO?

A Qualified Institutional Buyer is a registered institution, such as a mutual fund, insurer, bank or foreign portfolio investor. SEBI classes it as sophisticated enough to bid in the institutional portion of a book built offer, which carries at least 50 percent of the issue.

What is the difference between QIB and NII?

A QIB is a registered institution bidding in the 50 percent reserved for that class. An NII, a non-institutional investor, is an individual or entity bidding above 2 lakh rupees in the 15 percent reserved below the QIB portion. No institutional registration is needed to qualify as an NII.

Why do QIBs bid on the last day?

A QIB bid cannot be revised down once placed, so institutions wait to commit. Merchant bankers typically already hold informal commitments before the issue opens. The public multiple mostly confirms interest lined up in advance.

What is basis of allotment?

Basis of allotment is the document the issue's registrar publishes after bidding closes. It shows exactly how the shares in each category, QIB, NII and retail, were divided among the bids received.

How is IPO allotment done in the retail category?

When the retail category is oversubscribed, shares are allotted by a computerised lottery. Each eligible application gets an equal chance at one lot. QIB and NII allotments instead scale with the size of the bid.

Crypto investments are subject to market risk. Not financial advice.