- The cut-off price is the price at which shares are finally issued to investors in an IPO. It can be any price within the specified price band determined during the book-building process. Practically, the cut-off price usually refers to the maximum price at which one can bid.
For example: - If the issue price range is ₹480 to ₹505, then the cut-off price for applying will be ₹505. Investors can place bids at any price between ₹480 and ₹505. If an investor bids at the maximum price or selects the cut-off price option:
- They cannot place a bid at any other price.
- They become eligible for allotment at the final issue price discovered through the book-building process. Therefore, it is advisable for investors to bid at the cut-off price to maximize their chances of allotment.
- Note: HNIs (bids exceeding ₹2 lakh) are not eligible to apply at the cut-off price.
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