Retail Individual Investor (RII) is SEBI's formal category for IPO applicants whose total bid value does not exceed ₹2 lakh. A single PAN can submit only one retail bid per IPO. The retail category gets a minimum 35% reservation in mainboard IPOs and is the only category allowed to bid at cut-off price.
On oversubscribed mainboard issues, retail allotment becomes a lottery. The minimum allotment is one lot — so a retail applicant who bid for 13 lots either gets allotted one lot or nothing, depending on the draw. The maximum retail allotment per PAN is calculated to keep the total under the ₹2 lakh cap.
Retail investors are the largest applicant base by count but the smallest by aggregate rupee value in most issues. SEBI rules — cut-off bidding, fixed lot size, the ₹2 lakh cap — are designed to ensure retail can participate fairly without being crowded out by larger institutional or HNI bids.