How To Apply IPO In HNI Category

A company uses IPO to sell its company stocks directly to public investors for their first time.  Investors can apply for an IPO under different categories based on the investment amount.  The HNI category is one of these categories which investors can use.  The article shows what an IPO means and it teaches readers how to apply for HNI category IPOs through a direct method.

Understanding IPO And HNI Category

The IPO process organizes investors into three groups which include

• Retail investors
• Institutional investors
• Non-institutional investors.

HNI category members belong to the non-institutional investor group because they apply through this category.

An investor belongs to HNI category when he or she applies with an amount more than 2 lakh Indian Rupees.

The classification system uses the single IPO application amount as its basis to assign categories to investors.

The HNI category which includes all eligible entities consists of individuals and Hindu Undivided Families and companies and other entities.

Basic Requirements To Apply

The HNI category needs these three requirements before an applicant can proceed with their IPO application.

• Application amount above ₹2 lakh
• Required Demat account
• ASBA enabled bank account

The applicant must complete the KYC process to meet requirements

What Is ASBA

In IPO ASBA stands for Application Supported by Blocked Amount. The bank account maintains the application amount in the blocked state until the process reaches its allotment stage. The shares are allocated only after which the respective amount gets deducted. All IPO applications including HNI category applications use this method as their standard procedure.

Types Of HNI Investors

The division of the HNI category creates two separate groups which contain two distinct sections.

• The Small HNI category starts at ₹2 lakh and ends at ₹10 lakh.
• The Big HNI category starts at ₹10 lakh and continues to higher amounts.

The division uses total application amount as its deciding factor.

How To Apply IPO In HNI Category

The HNI category IPO application process requires applicants to follow direct and simple operational procedures

1. The first step requires you to choose between available IPOs

• The IPOs active at your bank or brokerage platform should be checked.
• The IPO you want to apply for should be selected as your choice.

2. The second step requires you to log in to your account.

• The net banking account requires you to log in or you can use your trading account for that purpose.
• The IPO section provides access to all ongoing IPOs which people can view.
• The HNI category needs to be chosen by users who fill out the form through the HNI or non-institutional category selection.
• The system automatically selects the amount which is above ₹2 lakh.

3. The third step requires you to enter your bid details.

The following information should be completed by you.

• The bid price should be entered according to its designated price range between the two price limits.
• The total investment amount exceeds ₹2 lakh should be entered as the investment amount.

4. The fourth step requires you to use ASBA to block your funds.

The application amount gets blocked from your bank account through ASBA service.

The fifth step requires you to submit your application.

• The form needs to be reviewed by you before proceeding with the submission process.
• The system will create a confirmation message after you complete all steps.

The sixth step requires you to check allotment status.

The allotment status can be checked by you after the IPO ends through your bank or broker platform.

Key Points To Remember

• The application amount must be above ₹2 lakh
• The application amount cannot be reduced after submission
• The category uses proportional allotment method because of high demand for that category.
• The allotment process needs to finish before funds become available again.

Conclusion

The investors who purchase shares during an IPO process enable public access to their company stock for its first time. 

The HNI category which exists within the non-institutional segment establishes its boundaries through the application amount requirement.  The ASBA procedure together with application steps requires applicants to understand eligibility requirements before they can apply IPOs through HNI category. The identical process operates through all banking and brokerage platforms.