Qualified Institutional Buyer (QIBs)
Updated on March 6, 2023
QIB stands for Qualified Institutional Buyers.They are the biggest class of investors in any IPO. As per the definition of SEBI QIBs are investors with vast corpus for investment as well as the financial expertise to evaluate the investment option based on risk-return parameters and the growth potential of the companies.
The list of eligible investors that fall under the QIB category includes:
a. Mutual Funds
b. Scheduled Commercial Banks
c. Foreign Investors registered with SEBI
d. Bilateral and Multilateral Development Financial Institutions
e. Venture Capital registered with SEBI
f. Insurance companies registered under IRDAI
g. State Industrial Development Corporations
h. A PF or Pension Fund with a corpus of Rs. 25,00,00,000 or more
i. Public Financial Institutions under section 4A of the Companies Act 2013
SEBI Guidelines for QIB category
As per SEBI guidelines, these rules are applicable for the QIB category of investors:
a. There have to be at least 2 or more allotted under the QIB category when the aggregate issue size is up to Rs. 250,00,00,000.
b. When the aggregate issue size is more than Rs. 250,00,00,000, the minimum number of allottees under the QIB category has to be 5.
c. QIBs are allowed a share of approximately 50% of the issue size in any IPO. 60% of the QIB category of investors are anchor investors.
d. No single allottee can be allotted more than 50% of the issue size.