HNI is the colloquial term for the Non-Institutional Investor (NII) category in an IPO. SEBI defines NII as applicants whose total bid value exceeds ₹2 lakh — there is no upper cap on NII bids. NII applicants cannot bid at cut-off; they must specify a particular price within the price band.
Mainboard IPOs reserve a minimum 15% of the issue for the NII category. The NII portion is further split into Small HNI (₹2-10 lakh bids) and Big HNI (above ₹10 lakh) sub-categories, with shares allocated proportionally within each. The allocation is not lottery-based — every NII applicant typically gets at least some shares if there is meaningful oversubscription.
HNIs commonly leverage credit lines from brokers (called 'IPO funding') to bid much larger amounts than their actual deployable capital. This is risky on oversubscribed IPOs where the leverage cost can exceed listing gains. The trend has cooled significantly after SEBI tightened IPO funding rules in 2021-22.