Non-Institutional Investors (NIIs)
Almost every explanation of non-institutional investors starts with the same line: anyone bidding more than ₹2 lakh in a public issue. That is a useful rule of thumb and it is not the definition. SEBI defines the category by exclusion, and the difference matters for anyone who is not an individual.
This page sets out what the regulations actually say, how much of an issue the category receives, and the split inside it that decides your odds of an allotment.
Dhanvantri Capital Services Private Limited, known as Dhanvantree, is an AMFI-registered mutual fund and Specialised Investment Fund distributor, ARN-194216, and a distributor of portfolio management services registered with APMI, APRN10201. We explain how the category works; we do not handle public issue applications. The choice is yours.
Who counts as a non-institutional investor
Everyone who is neither of the other two. The SEBI (Issue of Capital and Disclosure Requirements) Regulations 2018 put it in one line at Regulation 2(1)(jj): a non-institutional investor “means an investor other than a retail individual investor and qualified institutional buyer”.
That is the whole test. There is no bid size in it, no net worth requirement and no registration. You are in this category because you failed to qualify for the other two.
The practical effect shows up once you read the companion definition. Regulation 2(1)(vv) says a retail individual investor “means an individual investor who applies or bids for specified securities for a value of not more than two lakhs rupees”.
Two conditions, not one. The applicant has to be an individual and the bid has to be ₹2 lakh or less. Fail either and the retail category is closed.
One case sits between the two. The regulation says “individual” and never mentions a Hindu undivided family, but the standard bid cum application form lists HUF under investor status with two notes: it “should apply only through Karta”, and an “application by HUF would be treated on par with individual”. So an HUF bidding within the retail limit through its Karta is not pushed into this category by being a non-individual.
| Applicant | Bid | Category |
|---|---|---|
| An individual | ₹1,50,000 | Retail individual investor |
| An individual | ₹3,00,000 | Non-institutional |
| An HUF, through its Karta | ₹1,50,000 | Treated on par with an individual |
| An ordinary private limited company | ₹50,000 | Non-institutional |
| An IRDAI-registered insurance company | ₹50,000 | Qualified institutional buyer |
The third row is where the ₹2 lakh shorthand breaks. An ordinary company bidding fifty thousand rupees is not a retail investor, because it is not an individual, so it sits in the non-institutional category alongside applicants bidding crores.
The fourth row is why the test has to be applied in full. Being a non-individual does not land you here automatically: it only rules out the retail category. Whether you then fall in this category or the institutional one depends on the third definition.
The ₹2 lakh line, and what it actually marks
A ceiling on the retail category, not a floor on this one. The figure appears only in the retail definition, and nothing in the definition of this category mentions an amount at all. That is precisely why a small application from a company lands here.
For an individual, the line works the way most people describe it. Bid ₹2 lakh or less and you are retail. Bid a rupee more and you are non-institutional, with different allocation rules and a different chance of allotment.
Two further points follow from the wording.
There is no upper limit in the definition. The category runs from a fifty-thousand-rupee company application to a multi-crore bid, which is why SEBI later split it in two. That split is further down this page.
Qualified institutional buyers are a defined list, not a size. An investor does not become a qualified institutional buyer by bidding large. Regulation 2(1)(ss) sets out a closed list of entity types, and an investor outside it stays non-institutional however much it bids.
The list runs to fourteen entries. It includes mutual funds, alternative investment funds and foreign venture capital investors registered with the Board, scheduled commercial banks, public financial institutions, insurance companies registered with the IRDAI, state industrial development corporations, systemically important non-banking financial companies, and foreign portfolio investors other than individuals, corporate bodies and family offices.
Two entries carry a size test of their own: a provident fund and a pension fund each qualify only with a minimum corpus of twenty-five crore rupees. A smaller fund of either kind does not come within those two entries, and unless it falls within another entry on the list it sits in this category instead.
How much of an issue this category receives
Fifteen per cent, and the direction of that figure changes with the type of issue. Regulation 32 sets two different tables depending on which route the company has used to come to market, and the share reserved here reads differently in each of them.
These tables govern book-built issues and nothing else. Where an issue is made by another route, its allocation is set elsewhere in the regulations.
Where the company qualifies under Regulation 6(1), broadly the profitability route, Regulation 32(1) requires:
| Category | Share of the net offer |
|---|---|
| Retail individual investors | Not less than 35% |
| Non-institutional | Not less than 15% |
| Qualified institutional buyers | Not more than 50%, with five per cent of that portion allocated to mutual funds |
Where the company comes under Regulation 6(2), the route used when those conditions are not met, Regulation 32(2) reverses the emphasis:
| Category | Share of the net offer |
|---|---|
| Retail individual investors | Not more than 10% |
| Non-institutional | Not more than 15% |
| Qualified institutional buyers | Not less than 75% |
The non-institutional number is 15 in both tables, which is why most summaries give one figure and stop. But “not less than” and “not more than” are opposite instructions. In the first case 15% is a floor the issue must meet. In the second it is a ceiling it cannot exceed.
Checking which regulation an issue is made under tells you whether that 15% can grow.
The split inside the non-institutional portion
One third and two thirds, by application size. This is the part that sets which pool an application competes in, and it is the one most published explanations leave out entirely. Regulation 32(3A) carved what had been a single pool into two in 2022, and the outcome then turns on subscription.
Regulation 32(3A), again for book-built issues, divides the category’s allocation between two sub-categories:
| Sub-category | Application size | Share of the NII portion |
|---|---|---|
| Smaller applications | More than ₹2 lakh and up to ₹10 lakh | One third |
| Larger applications | More than ₹10 lakh | Two thirds |
A proviso allows the unsubscribed part of either sub-category to go to applicants in the other.
Before this rule, the whole category competed as one pool, and an application of a few lakh rupees sat against bids many times its size. Splitting it carved out a third of the portion for the smaller end.
The regulation’s own footnote dates it: the sub-division applies to issues opening on or after 1 April 2022, and from 1 July 2022 for issues of ₹10,000 crore or more.
So the question that matters when you apply is not only how much of the issue is reserved for this category. It is which of the two sub-categories your application size puts you in, and how heavily that one is subscribed. Neither the split nor the percentage settles an allotment on its own.
Non-institutional investors next to the other two categories
Three categories, three different sets of rules. They are not tiers of one ladder, and comparing them on bid size alone misses what actually separates them: who is eligible, how the share is set, and whether the portion is divided further.
| Comparison | Retail individual | Non-institutional | Qualified institutional buyer |
|---|---|---|---|
| Defined by | Being an individual, bidding up to ₹2 lakh | Being neither of the others | Being a listed type of entity |
| Minimum share, Reg 6(1) issue | 35% | 15% | None set |
| Maximum share, Reg 6(1) issue | None set | None set | 50% |
| Sub-categories | No | Yes, two | No |
| Non-individuals allowed | No | Yes | Yes |
The anchor investor sits inside the qualified institutional buyer portion rather than alongside these three, and the size of the whole offer is covered on issue size.
What this means when you apply
Your category is fixed by who you are and how much you bid, not chosen. Work it out before the issue opens, because the sub-category boundary at ₹10 lakh changes which pool your application competes in, and that is settled by the amount you enter.
Three things are worth checking against the offer document each time.
Which regulation the issue is made under. That decides whether the 15% is a floor or a ceiling. The rule itself is in the regulations; what the offer document tells you is which route this particular issue has taken and the allocation it has disclosed.
Where your application size falls. Just over ₹10 lakh puts you in the two-thirds pool with much larger bids. Just under puts you in the one-third pool. Neither is better in the abstract; it depends on how each is subscribed in that issue.
Whether you are an individual at all. Applying through a company, a trust or a partnership removes the retail option entirely, whatever the amount, and which of the remaining two categories you land in then depends on the list in Regulation 2(1)(ss). An HUF is the exception: applying through its Karta, it is treated on par with an individual on the application form.
The figures above are from the regulations as last amended on 21 March 2026. Allocation and sub-category rules change by amendment, so confirm them in the offer document for the issue in front of you.
Common Questions
Investors who are neither retail individual investors nor qualified institutional buyers. SEBI’s Regulation 2(1)(jj) defines the category purely by exclusion, so it covers high net worth individuals bidding above ₹2 lakh and also non-individual applicants of any size that are not on the institutional list.
The definition sets none. For an individual the category begins just above ₹2 lakh, because that is where the retail definition stops. A non-individual applicant falls into the category at any amount, since the retail category is open only to individuals.
In a book-built issue, not less than 15% of the net offer where it is made under Regulation 6(1), and not more than 15% under Regulation 6(2). The figure is the same; whether it is a floor or a ceiling is not.
In a book-built issue, one third of the portion is reserved for applications of more than ₹2 lakh and up to ₹10 lakh, and two thirds for applications above ₹10 lakh. An unsubscribed part of either may be allotted to the other. The split decides which pool an application competes in, not the outcome, and it applies to issues opening on or after 1 April 2022.
Not retail, and usually non-institutional. Regulation 2(1)(vv) limits the retail category to an individual investor, so a company, trust or partnership is outside it at any size. It is non-institutional unless it appears on the qualified institutional buyer list in Regulation 2(1)(ss), which covers banks, registered funds, IRDAI-registered insurers and similar entities.
Not exactly. High net worth individual is a market term for the individuals inside this category. Non-institutional investor is the regulatory category, and it also contains non-individual applicants who would never be described as HNIs.
Applications in a public issue are made through the process set out in the offer document for that issue. Check the application methods the offer document specifies rather than assuming the process is the same across issues.
The percentage is set by regulation, not by the company. What changes is whether the issue falls under Regulation 6(1) or 6(2), which decides whether 15% is the minimum or the maximum for this category.
Disclaimer: The views expressed here are of the author and do not reflect those of Dhanvantree. Mutual funds are subject to market risks, please read the scheme documents carefully before investing.