Knowledge Base

When you apply for an IPO, you can’t choose any random number of shares. Applications must be submitted in fixed multiples called lots. Understanding lot size helps you plan your application and budget correctly.

What is a Lot?

A lot is the minimum number of shares you must apply for in an IPO. You can apply for 1 lot, 2 lots, 3 lots, and so on but you cannot apply for a number of shares that doesn’t fit neatly into that multiple.

For example, if the lot size is 30 shares and the issue price is ₹500, one lot costs ₹15,000. You cannot apply for 45 shares; it has to be 30, 60, 90, and so on.

How is Lot Size Decided?

SEBI guidelines require the minimum application value in a mainboard IPO to be between ₹10,000 and ₹15,000 for retail investors. The company and its bankers calculate the lot size based on the issue price to keep the minimum application within this range. A higher issue price means a smaller lot size; a lower issue price means a larger lot size.

What’s the Maximum You Can Apply For?

As a retail investor, your total application in a single IPO cannot exceed ₹2 lakh. Depending on the lot size and issue price, this means you can apply for multiple lots but stay within that ceiling.

SME IPOs Are Different

For SME IPOs listed on NSE Emerge or BSE SME, the minimum application size is significantly higher, typically ₹1 lakh or more. The lot sizes in SME IPOs are much larger as a result, and they carry different risk profiles compared to mainboard IPOs.