IPO cut-off price: what it means and when to tick it

Updated 26 October 2026 · 4 min read

Bidding at the cut-off price means you agree to buy the shares at whatever final price is fixed within the price band. You do not choose a number yourself. Your broker blocks money at the top of the band, and if the final price turns out lower, the difference is released after allotment.

For most retail investors, ticking the "cut-off" box is the sensible default. It makes sure your bid is never thrown out for being too low, and it costs you nothing extra, because every allotted investor pays the same final price. This guide explains how cut-off works, who can use it and what happens when you do not.

What cut-off actually means

In a book-built IPO, the final issue price is set after bidding closes, somewhere inside the price band. A bid at a specific price, say ₹102 in a ₹100–105 band, only counts if the final price is ₹102 or lower. A cut-off bid has no price limit inside the band: it counts whatever the final price is. For the purpose of building the book, cut-off bids are treated as demand at the cap price.

Who can bid at cut-off

NIIs and QIBs must state a price. In practice, HNIs who want to be sure of being counted usually bid at the cap price, which has the same effect as cut-off for them.

Why retail should usually tick cut-off

• No risk of exclusion: in a popular IPO the price is almost always fixed at the top of the band, and any bid below it is simply not considered.
• No saving from bidding low: you never pay your bid price, only the final price. A lower bid cannot get you a discount.
• Same money blocked: the broker blocks at the cap either way, so cut-off does not tie up more funds.
• Simpler: you do not need to guess where the price will land.

There is one reason someone might not tick cut-off: they genuinely do not want the shares above a certain price. That is a valid personal choice. But it should be a deliberate decision, not an accident caused by leaving the default price at the floor.

What happens if you bid below the final price

Your bid is valid when placed, the money is blocked and the mandate is approved, but at allotment it is left out because your price is lower than the final issue price. The registrar may show it as not allotted or as rejected for price. The blocked amount is released by T+2, two working days after the issue closes. Many first-time investors think they lost the lottery when, in fact, their bid was never eligible.

If the final price is lower than the cap

Say the price band is ₹100–105, the lot is 142 shares and you bid for two lots at cut-off. Your broker blocks 284 × ₹105 = ₹29,820. Now suppose demand is weak and the final price is fixed at ₹101.

So cut-off never makes you pay more than the final price. You simply have the cap amount blocked for a few days, as everyone does.

Cut-off in the employee and shareholder quotas

Employee quota bidders can also bid at cut-off, and the employee quota often comes with a discount to the final price. In that case, the amount debited reflects the discounted price, and the RHP explains exactly how the discount is applied. Shareholder-quota bidders bid at cut-off the same way as retail investors. If you are eligible for one of these quotas and also bid in retail from the same PAN, tick cut-off in both.

Can you change a bid to cut-off?

Yes, while the issue is open you can modify your bid in the broker app, including switching to cut-off. A modified bid usually needs a fresh UPI mandate approval. Once the issue closes at 5 pm on the last day, no changes are possible.

Checking it before you apply

Each IPO page on this site shows the price band and the amount blocked per lot at the cap, which is the amount a cut-off bid blocks. After applying, tap "＋ I applied" to add the IPO to My IPOs; it follows the allotment and listing, and the one-tap allotment check uses PANs saved only on your own device.