10.10What is the retail investor quota?
1What is it?
The share of the IPO reserved for Retail Individual Investors (RIIs) applying up to ₹2 lakh, usually 35% (10% in some issues for companies that don’t meet profitability conditions).
2Why does it exist?
It guarantees small investors a fair portion. When oversubscribed, SEBI rules aim to give at least one lot to as many retail applicants as possible via a lottery.
3Quick revision
- Usually 35% for retail.
- Lottery for one lot when oversubscribed.
4Knowledge check
Q1. Typical retail quota?Show answer
35%.
Q2. Does applying for more lots improve retail allotment chances in an oversubscribed issue?Show answer
Not much. Allotment is usually by lottery for one lot.
Q3. Retail limit?Show answer
₹2 lakh.