DRHP Lens“Subscribed 40 times” sounds like a verdict. It is really four separate numbers from four different groups of investors, and they do not mean the same thing. Here is how to read the subscription table properly.
The categories
For a typical main-board IPO by a company that meets SEBI’s profitability track record (Regulation 6(1) of the ICDR Regulations), the net offer is split as follows:
| Category | Share of the offer | Who applies |
|---|---|---|
| QIB (qualified institutional buyers) | Not more than 50% | Mutual funds, insurers, banks, FPIs, pension funds. Up to 60% of the QIB portion can go to anchor investors. |
| NII (non-institutional investors) | Not less than 15% | Individuals, HUFs, companies and trusts applying for more than ₹2 lakh. |
| Retail individual investors | Not less than 35% | Individuals applying for up to ₹2 lakh. |
A company that does not meet the profitability test lists under Regulation 6(2). There, at least 75% must go to QIBs, and retail is capped at 10%, because SEBI wants institutions to carry most of the risk. If you see a 10% retail quota, that is a signal worth noticing.
Big NII and small NII
Since 2022, the NII portion is split: one-third for applications above ₹2 lakh up to ₹10 lakh (small NII, or sNII) and two-thirds for applications above ₹10 lakh (big NII, or bNII). Allotment in NII is at the minimum NII application size, by draw when oversubscribed, so very large NII bids no longer get proportionately more shares.
Anchor investors
Anchors are QIBs who commit one working day before the issue opens. Up to 60% of the QIB portion can be allotted to them, with one-third of that reserved for domestic mutual funds. Their shares are locked in: 50% for 30 days and the remaining 50% for 90 days from allotment. Those two dates matter because supply can hit the market when each lock-in ends.
Which number matters most
- QIB subscription is the closest thing to a professional view, because QIBs usually do their own diligence and bid on the last day.
- NII subscription is often inflated by leveraged money chasing listing gains. Read it as sentiment.
- Retail subscription tells you about demand from people like you. It is the weakest signal of value.
- Anchor names matter more than the anchor amount. Recognised long-only funds are a better sign than a list of unfamiliar entities taking large allocations.
What subscription does not tell you
Heavy subscription can coexist with a stretched valuation, a large offer for sale and weak cash flows. The subscription table tells you who wanted the shares at the IPO price. It does not tell you whether the price was fair. For that, read the Basis for Offer Price section and the red flags in our checklist, or run the document through DRHP Lens.
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Analyse a documentFrequently asked questions
What does IPO subscribed 10 times mean?
It means investors bid for ten times the number of shares on offer in that category. The overall figure is a weighted total; the QIB, NII and retail figures should be read separately.
What is QIB in an IPO?
QIB stands for qualified institutional buyer: mutual funds, insurance companies, banks, foreign portfolio investors and similar institutions. In most main-board IPOs they get up to 50% of the offer.
What is the difference between bNII and sNII?
Small NII (sNII) covers applications above ₹2 lakh up to ₹10 lakh and gets one-third of the NII portion. Big NII (bNII) covers applications above ₹10 lakh and gets two-thirds.
What is the anchor investor lock-in period?
Fifty percent of the shares allotted to anchor investors are locked in for 30 days and the remaining fifty percent for 90 days from the date of allotment.
Is high IPO subscription a good sign?
It shows demand at the IPO price, especially from QIBs, but it is not proof of value. Strong subscription can coexist with an expensive valuation or a large offer for sale by existing shareholders.
This guide is general education about how Indian offer documents are structured. It is not investment advice or a recommendation to subscribe to any issue. Regulations change; always read the current offer document and the SEBI regulations it refers to, and consult a SEBI-registered investment adviser before you invest.