What 'Bidding at Cut-Off' Means in an IPO
The little checkbox that says 'cut-off' is the safest way for a retail investor to bid — here's why.
16 September 2026 · CoinWhisperer
When you apply for a book-built IPO, you're asked to choose a bid price within the band — or to simply tick “cut-off.” For most retail investors, ticking cut-off is the right call. Here's exactly what it means.
The cut-off price
The cut-off price is the single final price at which a book-built IPO is allotted, discovered from all the bids after the issue closes. When you bid at cut-off, you're telling the system: “I'll accept whatever that final price turns out to be, anywhere up to the cap.”
Why it protects you
If you instead bid a specific price below the eventual cut-off, your application is rejected — you bid too low. In a hot IPO the price is almost always discovered at the cap, so a below-cap bid simply loses you the allotment. Bidding at cut-off removes that risk: your bid can't be too low, because you've agreed to the final price.
How your blocked amount is calculated
When you bid at cut-off, the amount blocked in your account is computed at the cap price (the highest it could be). If the issue is finally priced below the cap, the difference is released. So you always need enough balance to cover the cap, even though you might pay less.
Example: band ₹140–₹150, lot of 100 shares. A cut-off bid blocks 100 × ₹150 = ₹15,000. If the issue is priced at ₹150, that's what you pay; if at ₹145, ₹500 is released.
When you might not bid at cut-off
- You believe the issue will be weakly subscribed and priced below the cap, and you want to bid a lower specific price to pay less (rare for retail, and you risk rejection if you misjudge).
- You're an HNI/QIB, where cut-off isn't an option anyway.
For the vast majority of retail applicants chasing allotment in a well-subscribed IPO, bid at cut-off, budget for the cap price, and don't overthink it.
Educational explainer, not investment advice.