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June 14, 2026
The Dispatch

Definition

Qualified Institutional Buyer (QIB)

A QIB is a large, sophisticated institutional investor — such as a mutual fund, bank, insurer or FPI — that is allotted a dedicated portion of an IPO.

Under SEBI ICDR Regulations, QIBs include mutual funds, scheduled commercial banks, insurance companies, pension and provident funds, FPIs, and venture/alternative investment funds. In a book-built IPO, at least 50% of the net offer is reserved for QIBs (75% if the company does not meet profitability norms).

QIBs do not get a 100% refund guarantee on under-allotment the way retail does, and their bids must usually be backed by an upfront margin. The anchor allocation is carved out of the QIB portion.

Related terms

  • Anchor InvestorAnchor investors are large institutional investors who are allotted IPO shares a day before the issue opens to the public, lending credibility to the offering.
  • Non-Institutional Investor (NII)An NII, often called an HNI, is an investor who applies for more than ₹2 lakh worth of shares in an IPO and falls outside the retail and QIB categories.
  • Retail Individual Investor (RII)An RII is an individual investor applying for up to ₹2 lakh in an IPO, who gets a reserved quota and can bid at the cut-off price.

Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.