The price at which shares are finally issued to investors in an IPO is known as the cutoff price.
Cut - off price can be any price within the specified price band during a book building issue. For example, if the issue price range is ₹480 to ₹505 then cut off price will be ₹505.
However, at the time of the applying to an IPO; cut off price is usually referred as the maximum price at which one can bid.
For Example:
if the issue price range is ₹480 to ₹505 then the cut of price applying will be ₹505 and investor cam ianvest at any price between ₹480 to ₹505
If an investor bids at maximum price or cut off price then:-
He cannot bid at any other price and
He will become eligible for allotment at any issue price discovered through the book-building process.
It is always advisable that an investor or bid at cutoff price.
NOTE: - HNI (who bid> ₹ 2 lakh) cannot bid at cut off price.always advisable that an investor invest or b