IPO Learning Guide
The cut-off price option lets an investor bid at whatever the final IPO price turns out to be, instead of picking a specific price within the band. It’s available only to Retail Individual Investors (RIIs) and is the simplest way to avoid your bid being rejected for pricing too low.
Also available in हिंदी and मराठी.
Every IPO has a price band — for example ₹100 to ₹110. Instead of choosing a price inside that band, an investor can select “Cut-off Price,” which is an instruction to buy at whatever final price the company determines through book building — even if that turns out to be the upper end of the band, ₹110.
Only Retail Individual Investors (applications up to ₹2 lakh) can bid at cut-off price. QIBs and NII/HNI investors are required to bid a specific price within the band and cannot use the cut-off option — see our QIB vs HNI vs Retail guide for the full category breakdown.
When you bid at cut-off, the amount blocked in your bank account (via ASBA) is calculated at the upper end of the price band — the worst case. If the final issue price is set lower than the band’s top, the difference is unblocked/refunded automatically after allotment.
Example: Price band ₹100–₹110, lot size 100 shares. Bidding at cut-off blocks ₹11,000. If the final price is fixed at ₹105, only ₹10,500 is actually debited and ₹500 is released back.
The trade-off is minor: your funds are blocked at the higher end of the band until allotment, even if the final price is lower.
No. The cut-off option is reserved exclusively for Retail Individual Investors.
The extra blocked amount is automatically refunded or unblocked once the final issue price and allotment are confirmed.
Functionally similar for fund-blocking purposes, but “cut-off” specifically means “whatever price is finally decided,” whereas manually selecting the top price is a fixed bid at that exact number.
