Reviewed on 24 Oct 2026 · Source: IPO Bulletin explainer; checked against SEBI ICDR Regulations 2018 (as amended) and offer-document practice
A Retail Individual Investor, or RII, is an individual who applies for shares in an IPO for a value of up to Rs 2 lakh. This is the category most ordinary investors fall into. In a standard book-built mainboard issue, at least 35 percent of the net offer is reserved for retail investors, so even when institutions dominate the book, a fixed share of shares is kept for small applicants. Each retail investor can submit one application per PAN, and the application can be for one lot up to the number of lots that keep the total value within Rs 2 lakh. Retail applications are usually made through a UPI ID linked to the bank account, which blocks the money until allotment. If the retail category is oversubscribed, allotment is made by a computerised lottery in which each valid applicant is given a chance to receive one lot. If it is not oversubscribed, everyone receives what they applied for. Retail subscription is reported live each day and is one of the figures people follow most closely.
Example: If the retail quota is 35 lakh shares and the lot is 100 shares, there are 35,000 lots available. If 3.5 lakh valid retail applications arrive, demand is 10 times the quota and a lottery picks about 35,000 winners, each receiving one lot.
Allotment is the step after an IPO closes in which the company decides who receives shares and how many. Once bidding ends, the registrar prepares the basis of allotment, which explains how the shares were shared between categories and applicants. If an issue is not oversubscribed in a category, most valid applicants get what they asked for. If it is oversubscribed, shares are rationed. In the retail category, successful applicants are chosen by a computerised lottery and each winner usually receives one lot, because the demand is far larger than the supply. Larger categories receive shares in proportion to their bids. After allotment, shares are credited to the demat accounts of successful applicants, and money for unsuccessful applications is released from the ASBA block. SEBI requires the whole process, from issue close to listing, to be completed within three working days. You can check your allotment status on the registrar's website using your application number, PAN or demat details, and on the exchange page for the issue.
Worked example
If the retail quota is 35 lakh shares and the lot is 100 shares, there are 35,000 lots available. If 3.5 lakh valid retail applications arrive, demand is 10 times the quota and a lottery picks about 35,000 winners, each receiving one lot.
