QIB Portion in IPO: The 50% Cap, the 75% Route and Where Anchors Fit

Open any IPO subscription table and the first line most traders look at is the QIB number. If qualified institutional buyers have bid 80 times their quota, the mood on the issue changes. But the QIB portion in an IPO isn’t a fixed slice. Its size depends on which eligibility route the company used, a chunk of it may already be gone to anchor investors before the issue even opens, and part of it is fenced off for mutual funds.

We’ll go through what the rules say, straight from the SEBI ICDR Regulations, 2018 (as amended up to March 21, 2026), and then run a made-up issue through them so the percentages stop being abstract.

Who counts as a qualified institutional buyer

A QIB is a category defined in the regulations, not a label anyone can pick. The ICDR list includes:

• mutual funds, venture capital funds, alternative investment funds and foreign venture capital investors registered with SEBI;
• foreign portfolio investors, other than individuals, corporate bodies and family offices;
• public financial institutions and scheduled commercial banks;
• multilateral and bilateral development financial institutions, and state industrial development corporations;
• insurance companies registered with IRDAI;
• provident funds and pension funds with a minimum corpus of ₹25 crore (pension funds must be registered with PFRDA);
• the National Investment Fund, insurance funds run by the army, navy or air force, and insurance funds run by the Department of Posts;
• systemically important NBFCs.

There’s also a narrow entry for accredited investors, but only for their investment in angel funds under the AIF regulations, so it doesn’t matter for a normal IPO book. The short version: these are large, regulated pools of money. That’s why the market treats their bids as a signal.

The QIB portion in an IPO depends on the eligibility route

Regulation 6 gives a company two doors into the main board. Which door it walks through decides how big the QIB portion has to be.

Route one: the profitability route, with a 50% ceiling

Regulation 6(1) is for companies that meet the track-record tests: net tangible assets of at least ₹3 crore in each of the preceding three full years, an average operating profit of at least ₹15 crore over the preceding three years with an operating profit in each of those years, and a net worth of at least ₹1 crore in each of the three years. We’ve covered these tests in detail in our guide to IPO eligibility norms.

For a book-built issue under this route, regulation 32(1) splits the net offer like this:

• not less than 35% to retail individual investors;
• not less than 15% to non-institutional investors;
• not more than 50% to QIBs, of which 5% is allocated to mutual funds.

Read the wording carefully. Retail and NII get floors. QIBs get a ceiling. A profitable company can’t hand institutions more than half the net offer, however keen they are.

Route two: the QIB route, with a 75% floor

Regulation 6(2) is the alternative for companies that don’t meet those profitability conditions. Plenty of loss-making tech and new-age companies list this way. SEBI’s FAQ on public issues calls it Entry Norm II, “commonly known as QIB Route”.

The deal here flips. The issue has to be book built, and the company must undertake to allot at least 75% of the net offer to QIBs and refund the full subscription money if it can’t. Regulation 32(2) then sets the split:

• not more than 10% to retail individual investors;
• not more than 15% to non-institutional investors;
• not less than 75% to QIBs, again with 5% allocated to mutual funds.

On the profitability route, QIBs get a ceiling of 50%. On the QIB route they get a floor of 75%. Same category, opposite rule, and it tells you who SEBI wants carrying the risk.

The logic is fairly plain. If a company hasn’t shown three years of profit, the regulator wants professional money doing most of the price discovery, and retail exposure capped at a tenth of the net offer.

The 5% mutual fund slice inside the QIB book

Both routes carve out 5% of the QIB allocation for mutual funds. This isn’t a cap on mutual funds. The regulations add a proviso that, on top of the 5%, mutual funds are also eligible for allocation from the balance available to QIBs. So a fund house competes in the general QIB pool too. The 5% just guarantees the category some room if the rest of the QIB book is heavily oversubscribed by foreign investors or insurers.

The exact base on which an issuer computes this slice is spelled out in the issue structure section of its red herring prospectus, so that’s the line to check for any real issue.

Where anchor investors fit

Anchors aren’t a separate category sitting alongside QIBs. They come out of the QIB portion. Regulation 32(3) lets the issuer allocate up to 60% of the portion available to QIBs to anchor investors, under the conditions in Schedule XIII. An anchor has to be a QIB, and on the main board each anchor application must be worth at least ₹10 crore.

Schedule XIII adds a few more rules that matter when you read an anchor announcement:

• Timing. Anchor bidding opens one day before the issue opens, and the allocation is completed the same day.
• Reservation inside the anchor book. 40% of the anchor portion is reserved: 33.33% for domestic mutual funds and 6.67% for life insurance companies and pension funds. If the insurer and pension slice is under-subscribed, it can go to domestic mutual funds. This split came in through an amendment effective December 1, 2025; before that, the rule was simply that one-third of the anchor portion was reserved for domestic mutual funds.
• Number of anchors. For an anchor allocation up to ₹250 crore, a minimum of 2 and a maximum of 15 anchors are allowed, each with a minimum allotment of ₹5 crore. Above ₹250 crore, it’s a minimum of 5 and a maximum of 15 for the first ₹250 crore, plus 15 more for every additional ₹250 crore or part of it, again with a ₹5 crore minimum each.
• Price. If the final issue price is higher than the anchor price, anchors pay the difference. If it’s lower, they don’t get a refund and are allotted at the anchor price.
• Lock-in. Half of the shares allotted to anchors are locked in for 90 days from allotment, and the other half for 30 days.

We’ve written a separate explainer on anchor investors in an IPO if you want the full picture of that book. The point for this article is simpler: the QIB subscription figure you see on the exchange during the issue is usually measured against what’s left after the anchors have taken their share.

A worked example with made-up numbers

Let’s take a hypothetical company, XYZ Ltd, raising a net offer of ₹1,000 crore. All numbers here are invented for illustration.

Case A: XYZ uses the profitability route

• Maximum QIB portion: 50% of ₹1,000 crore = ₹500 crore.
• Retail gets at least 35% = ₹350 crore, and NII at least 15% = ₹150 crore.
• Suppose XYZ uses the full anchor allowance: 60% of ₹500 crore = ₹300 crore goes to anchors the day before the issue opens.
• Inside that anchor book, 33.33% of ₹300 crore, roughly ₹100 crore, is reserved for domestic mutual funds, and 6.67%, roughly ₹20 crore, for life insurers and pension funds.
• Since the anchor allocation is above ₹250 crore, XYZ needs at least 5 anchors. The cap works out to 15 for the first ₹250 crore plus 15 for the remaining ₹50 crore (it counts as “part thereof”), so up to 30 anchors.
• That leaves ₹500 crore − ₹300 crore = ₹200 crore for QIBs bidding in the regular issue window. The 5% mutual fund slice sits within the QIB allocation; the RHP will say whether it’s worked out on the full ₹500 crore or the post-anchor ₹200 crore.

Now say QIBs bid for ₹10,000 crore in the regular window. Against a ₹200 crore portion, that’s 50 times subscribed. Against the full ₹500 crore it would read as 20 times. Same demand, very different headline. This is why it helps to know which base a subscription table is using.

Case B: XYZ uses the QIB route instead

• Minimum QIB portion: 75% of ₹1,000 crore = ₹750 crore.
• Retail is capped at 10% = ₹100 crore, and NII at 15% = ₹150 crore.
• Anchors can take up to 60% of ₹750 crore = ₹450 crore.
• If QIB demand falls short of the 75% XYZ promised to allot, the company has to refund the full subscription money. And under Schedule XIII, an unsubscribed QIB portion in a 6(2) issue can’t be passed to other categories to fill the gap.

Look at retail in the two cases: ₹350 crore at the minimum in Case A, ₹100 crore at the maximum in Case B. For a retail applicant, the route alone can change your realistic odds of allotment a lot. Our IPO investing in India guide walks through how allotment works for small applicants.

When an issue’s QIB book is shown at 50 times, ask two questions first: is this the profitability route or the QIB route, and has the anchor portion already been taken out?

How QIB bids behave during the issue

Two rules shape the way QIB demand moves through the three days of bidding.

First, QIBs and non-institutional investors can’t withdraw or lower the size of their bids at any stage of the issue. Retail individual investors can withdraw or revise their bids until the issue closes. So once an institution has bid, that demand stays in the book.

Second, allotment to QIBs other than anchors is proportionate. There’s no lottery and no minimum-lot guarantee like the one retail applicants get. If the QIB portion is 50 times subscribed, each QIB roughly gets one-fiftieth of what it asked for, rounded as the rules allow. Anchors, on the other hand, are allotted on a discretionary basis within the limits above.

Under the profitability route, if retail or NII categories are under-subscribed, the unsubscribed portion in either can be allocated to applicants in other categories. That’s another reason the final allotment pattern doesn’t always match the headline percentages in the RHP.

Reading the QIB line on a real issue

When you look at a live IPO, a short checklist helps:

• Check the route. The RHP’s issue structure section says whether the company is eligible under regulation 6(1) or 6(2). That tells you whether QIBs hold a ceiling of 50% or a floor of 75%.
• Find the anchor allocation. It’s disseminated on the exchange website before the issue opens. Note who the anchors are, how much the domestic mutual funds took, and the lock-in dates.
• Know the base. Check whether the QIB subscription number you’re looking at excludes the anchor portion.
• Don’t copy the institutions blindly. A heavy QIB book says big money likes the price. It doesn’t say the stock will list at a premium, and anchors themselves can sell half their shares after 30 days.

Quick recap of the numbers

• Profitability route, regulation 6(1): QIBs not more than 50% of the net offer, retail not less than 35%, NII not less than 15%.
• QIB route, regulation 6(2): QIBs not less than 75%, retail not more than 10%, NII not more than 15%, and a full refund if the 75% isn’t met.
• 5% of the QIB allocation goes to mutual funds, who can also bid in the rest of the QIB pool.
• Up to 60% of the QIB portion can go to anchors, each applying for at least ₹10 crore on the main board.
• 40% of the anchor portion is reserved: 33.33% for domestic mutual funds and 6.67% for life insurers and pension funds.
• Anchor lock-in: 90 days on half the shares, 30 days on the other half.

Disclaimer: This article is for education only and is not investment advice or a recommendation to apply for any IPO. The company and numbers in the examples are hypothetical. Regulations change, so check the current SEBI text and the offer document, and speak to a SEBI-registered adviser before investing.