sNII stands for Small Non-Institutional Investor. It is the sub-category of the non-institutional investor group for bids above Rs 2 lakh and up to Rs 10 lakh. SEBI created it so that mid-sized bidders do not compete directly with very large bidders, who put in applications worth crores. One third of the non-institutional portion of a standard IPO is reserved for sNII, and the rest goes to the big group, called bNII. Because sNII bids need more than the retail cap, applicants in this category usually put in several lots, for example two to nine lots in a mainboard issue. The subscription of this category is reported separately on the exchanges and on IPO Bulletin, and if it is oversubscribed, allotment is by a lot-based lottery, so the minimum allotment is one lot. Many investors in this category fund their bids through short-term arrangements and cancel or reduce bids, so the number can drop after the last day. Check the limit carefully: if your total bid goes above Rs 10 lakh, it moves into the bNII category.
Example: In an issue with a lot costing Rs 14,950, an investor who bids for 14 lots, a total of about Rs 2.09 lakh, falls in the sNII category and competes with other bids between Rs 2 lakh and Rs 10 lakh.