If you see, there are two types of investors in the stock market, which is called Institutional Investor & Non-institutional Investor. If you are doing fundamental analysis, then you can see which investors have invested how much. While investing we should also see which investors have invested how much. For example, if you look at the holding patterns of stock, you will see how many holdings of promoters, public, FII’s, DII’s and other investors.
Retail investors are those who invest below two lakh rupees in securities, and they also are known as individual investors. These investors can purchase assets and invest in mutual funds, bonds, and stocks with the help of brokerage firms.
High Net-worth Individuals (HNI):
When the investor invests more than two lakh rupees in securities is called High Networth Individuals.
Retail investors and High Networth Individuals invest their own money, so they have their own decisions on investments.
Mutual Funds, Equity Funds, Insurance Companies, NBFC, Banks, etc. are come under Institutional investors. Institutional Investors make a lot of investments in stocks. FII and DII invest huge finds in companies by doing a full analysis of the company. You can see that there is a vast fund invested in good companies.
Institutional investors are divided into two categories in India (These are FII and DII)
FII means Foreign Institutional Investor And DII means Domestic Institutional Investors.FII means when a firm such as mutual funds, an insurance company, and any other banks, etc. invest abroad or in another country is called Foreign Institutional Investor (FII). For example other countries Institutions like the US, UK, etc. invest in India.
DII means domestic firms like mutual funds, an insurance company, Banks, LIC, etc. invest in domestic level or in their home country is called Domestic Institutional Investor (DII).
QIB: Qualified institutional buyer:
Institutions are in this category, such as mutual funds, scheduled commercial banks, foreign portfolio investors (category I & II), state industrial development corporations, venture capital, etc. can apply in this category, And these are the Qualified Institutional Investors. Qualified Institutional buyers are huge investors in financial markets.
Whenever there is a book building, that time, the reservation will be 50 percent for the QIB category. QIB investors invest only through complete data analysis. Before investing in IPO’s, check how many categories are booked their allotments.