India's IPO Buckets: What QIB, NII, and Retail Actually Mean
Jio Platforms and Zetwerk both just ran India's statutory QIB/NII/retail split. Here is how the three allocation buckets work, and what fills them.
Two of the largest India IPOs of the year closed their books within days of each other this week. Zetwerk's public offer ran October 15–19, with listing tentatively set for October 23. Jio Platforms' own window ran October 21–23, with listing expected October 28 — making it, at a price band of ₹1,065–1,119 per share and an issue of up to roughly ₹30,200 crore (about $3.1–3.2B), India's largest-ever IPO. Both deals ran through the same mechanical process: a statutory split of the public offer into three fixed buckets, each allotted separately, each by its own formula. That structure is worth understanding on its own terms, separate from either company's valuation, because it decides who actually gets shares and how, long before the stock trades on Zorro's recent-IPO tracker.
Three buckets, not one book
A US bookbuild lets underwriters allocate shares almost entirely at their own discretion, weighting toward whichever investors they expect to hold the stock. India's mainboard rules, set under SEBI's ICDR regulations, don't give underwriters that discretion. The public offer is divided into three reserved categories before a single order is taken:
- Qualified Institutional Buyers (QIB) — up to 50% of the net offer, reserved for mutual funds, insurers, banks, and foreign portfolio investors.
- Non-Institutional Investors (NII), sometimes called the HNI bucket — at least 15%, for applications above ₹2 lakh.
- Retail Individual Investors (RII) — at least 35%, for applications up to ₹2 lakh.
The exact split for a given deal is fixed in its Red Herring Prospectus and can shift within those statutory bounds, but the three-way division itself is mandatory for every mainboard book-built issue — Zetwerk's and Jio's filings both run it. Shares reserved for Reliance shareholders and Jio employees in Jio's case sit outside this three-way split as separate carve-outs, on top of it rather than instead of it.
The QIB bucket has its own carve-out
The QIB bucket isn't pure book-building either. Up to 60% of the QIB portion can be allotted to anchor investors — institutions that commit at least ₹10 crore apiece a day before the public offer opens, at a price fixed that morning. We covered how that anchor tranche works, and how it differs from a true Hong Kong-style cornerstone commitment, in Cornerstone Investors — How Anchor Money Gets Locked Into an IPO; Zetwerk's anchor book opened October 14 with more than 30 institutions, including ADIA, Norges Bank, and Goldman Sachs Asset Management, taking that allocation before the rest of the QIB book ever opened to ordinary institutional bidding.
NII isn't one bucket anymore
Since April 2022, the 15% NII reservation has itself been split by application size, a change meant to stop the largest HNI applications from crowding out smaller ones. Roughly a third of the NII pool — about 5% of the total offer — is set aside for applications between ₹2 lakh and ₹10 lakh ("small NII"), with the remaining two-thirds — about 10% — reserved for applications above ₹10 lakh ("big NII"). Both sub-buckets allot pro-rata within themselves, so a flood of large-ticket HNI demand can no longer crowd out the smaller-ticket NII applications the way it once could.
Retail: a lottery, not a pro-rata split
The retail bucket works differently again. When retail demand exceeds the shares reserved for it — the normal case in any heavily oversubscribed deal — allotment isn't proportional to bid size. Every valid applicant is guaranteed at least one lot if there's any allotment at all, and the registrar runs a computerized lottery among applicants for the remaining lots. That's why a retail investor who bid for ₹50,000 of shares in a 50-times-oversubscribed retail book has roughly the same odds of winning one lot as a retail investor who bid for the full ₹2 lakh ceiling — size stops mattering once the book clears a certain multiple, because the lottery allocates by applicant, not by rupee.
When a bucket doesn't fill
The reverse case matters too. If any one of the three categories is undersubscribed, SEBI's rules let the unfilled shares spill into whichever category is oversubscribed, subject to approval from the stock exchange. That provision is exactly why a single day's subscription number can be a misleading signal on its own: as of the morning of its final bidding day, October 19, Zetwerk's issue had reportedly been covered only about 0.32 times overall — a figure that, by itself, says more about how late-stage demand typically concentrates in the closing hours of a book than about where the deal ultimately landed, since both the final multiple and any cross-category reallocation are only settled once the book actually closes and allotment runs.
Why the mechanism outlasts the headline
None of this changes what a share of Jio or Zetwerk is worth once it lists — the three-bucket structure is a question of who gets allocated stock and how, not of valuation. But it's a structure every India-listed deal on Zorro's IPO pipeline will run through in some form, from the smallest SME board listing to Jio's record-setting book. Reading a subscription headline — "NII subscribed 8x," "retail subscribed 1.5x" — means knowing which of the three buckets, and which sub-bucket within it, that multiple actually describes, rather than assuming every oversubscription number is being measured the same way a US roadshow measures demand.