NII stands for Non-Institutional Investor. It covers individuals, HUFs, companies, trusts and other investors who bid for more than Rs 2 lakh in an IPO but are not Qualified Institutional Buyers. Because many high-net-worth individuals sit in this group, it is often called the HNI category. To be fairer to mid-sized bidders, SEBI split this category into two sub-categories: sNII, the small NII, for bids above Rs 2 lakh and up to Rs 10 lakh, and bNII, the big NII, for bids above Rs 10 lakh. One third of the NII portion is reserved for sNII and the remaining two thirds for bNII. Each sub-category is allotted separately, and the subscription of each is displayed on exchange data. The NII portion is usually not more than 15 percent of the net offer in a standard book-built issue. Allotment within this quota is by lot, so heavy oversubscription can mean many bids receive nothing. NII bids are commonly financed through UPI or ASBA, and some investors use short-term funding that is repaid after allotment, which influences how subscription looks on the last day.
Example: A net offer reserves 15 percent for NIIs. One third of that 15 percent goes to sNII bidders (Rs 2 lakh to Rs 10 lakh) and two thirds to bNII bidders (above Rs 10 lakh). If sNII is subscribed 30 times, a lot-based draw decides who gets shares.