Common Admission Test (CAT) follows percentile method as against the prevalent ranking method as is the norm in Indian competitive exams. The way percentile works is completely different than ranking system wherein the former is a measurement of relative performance while the later is an indicator for absolute performance.
The prime reason for this is to avoid confusion among candidates. In a typical ranking system, rankers from 1 should get their college of preference in admissions. Whereas in the selection criteria of IIMs, various weightages were given to academics, CAT performance, extra curricular etc. So a candidate aspiring for an admission to IIM should clear all the sectional cut off marks and also the overall cutoff in CAT. This algorithmic driven evaluation results in anomalies if ranking system is followed. For example, a candidate who scored 1st rank may not have cleared a particular section in the exam. In such a case, he wont be getting the call for second stage whereas a candidate who got 40th rank and cleared all the sectional cut-offs may get all IIM calls.
To avoid this confusion, percentile is being adopted wherein scoring above 99.0 percentile and clearing all the sectional cut offs become the main criteria for the candidates to be called for second stage of admission process. In addition, it will be difficult to assign a rank section-wise. Too many ranks like sectional ranks and overall rank results in lot of hair pulling. So, percentile looks much simpler and easy to understand.
How does percentile work
Percentile has a different way of representation than ranks. One someone says I got 99 rank then there are 98 people before him who got better marks. On the other way, one someone says I got 99 percentile then 1% of candidates who wrote the exam are before him or 99% of candidates are behind him. Same is the case with 98 percentile i.e., 2% of exam takers were before him.
So if 2,00,000 people attempted an exam and someone gets 99.11 percentile then typically he is at 1760~1780 position.
Calculation: (100.00 minus 99.11) percentage ppl before you i.e., 0.89% * 2,00,000.