The cut-off price is the choice that says you will take the shares at whatever price is discovered inside the band. You do not tick one of the prices on the form. You tick cut-off. Book building still discovers a single issue price. Your bid simply agrees to that price in advance, as long as it sits inside the published band.
SEBI’s primary-market FAQ limits who may do this. A retail individual investor can. An employee in the employee reservation can. A retail individual shareholder in a shareholder reservation can. A qualified institutional buyer cannot. A non-institutional investor cannot. If either of those two ticks cut-off, the bid is rejected. The option is not a courtesy. It is part of the category rules.
The bank still blocks money at the top of the band. Cut-off means the price might be the cap, so the block has to be large enough for the cap. If the discovered price is lower, the difference comes back. If you had bid one specific price below the discovered price, that bid can fail. A cut-off bid does not fail for that reason. It fails for other reasons: a bad PAN, a third-party account, a duplicate, or a value that is no longer retail.
The cap does not move
Cut-off does not lift the retail cap of ₹2,00,000. The test is the bid value at the cap price, after any discount the offer document allows. Add lots until that value crosses the cap, and the application is no longer a retail bid. It may be treated as non-institutional. A non-institutional bid at cut-off is rejected. Check the amount at the top of the band before you add a lot.
Up to 3 prices on one form are still one bid. Cut-off is one of the choices on that form, not a second application. A second form, or the same PAN on two applications, can be rejected as a multiple bid. An employee or a retail shareholder may also bid in the net public offer. That pair is allowed. It is not the forbidden second form.
This illustration is not a live issue. One lot of 100 shares at a cap of ₹100 is ₹10,000. 20 such lots block ₹2,00,000, which is the retail cap. If the discovered price is ₹90, the shares cost ₹1,80,000 and ₹20,000 is released. Nothing in that sum is a grey market premium. This site does not publish one.
Where it sits in the series
The application guide shows cut-off on the UPI and ASBA form. The allotment guide explains why the choice does not buy a better place in the retail draw. A cut-off bid and a bid at the floor price are one name each when the lottery runs. The price you accepted matters for what you pay. It does not add a ticket.
Once the shares list, a sale is taxed like any other listed equity. Section 196 (this was Section 111A) covers a sale within 12 months, at 20%. The capital gains calculator is the place for that sum. The cut-off price is only the price you agreed to pay.
Questions
Who is allowed to bid at the cut-off price?
A retail individual investor can. So can an employee, or a retail shareholder, in a reservation. A qualified institutional buyer or a non-institutional investor who ticks cut-off is rejected.
Does cut-off let me bid above the retail cap?
No. The retail cap stays ₹2,00,000 at the top of the band. A cut-off bid that crosses that value can be rejected, because the bid is no longer retail and non-institutional investors cannot use cut-off.
Why does the bank block the top of the band?
Cut-off accepts any price inside the band, so the block has to cover the highest one. If the discovered price is lower, the difference is released. In the site’s illustration, a lot at ₹100 costs ₹10,000, and a discovered price of ₹90 costs less.
Sources
Figures checked 31 Oct 2026.