What is the “cut-off price” in an IPO?

The cut-off price is the final price at which shares are allotted to investors in a book-built IPO. When a company launches an IPO, it usually provides a price band — for example, ₹100 to ₹110 per share. Investors can place their bids at any price within this range during the IPO period.  

After the bidding closes, the company and its merchant bankers analyze all bids and determine the final issue price — this is called the cut-off price. When retail investors select the “cut-off” option while applying, it simply means they are willing to subscribe at whatever the final price is decided. This ensures they stay eligible for allotment, no matter what the final price turns out to be.  

In short, choosing the cut-off price is a smart and convenient way to make sure your application remains valid for allotment without worrying about the exact price during the bidding process.