Qualified Institutional Buyer (QIB) is the SEBI-defined category for institutional investors permitted to participate in IPOs. It includes mutual funds, foreign portfolio investors (FPIs / FIIs), banks, insurance companies, sovereign wealth funds, pension funds, venture capital funds, and certain trusts.
Mainboard IPOs reserve up to 50% of the issue for the QIB category. Anchor allocations (the day-before-IPO institutional bidding) come out of the QIB portion — typically up to 60% of QIB. QIB allotment is proportional, not lottery-based.
QIB demand is a closely watched signal. Strong QIB subscription — particularly heavy mutual fund participation — is often interpreted as institutional validation of the issue's pricing and quality. Conversely, weak QIB demand on an otherwise heavily retail-subscribed issue signals retail FOMO without institutional conviction.