When you open an IPO application form, you cannot simply enter the number of shares you want. You must apply in 'lots' — a fixed bundle of shares set by the company before the issue opens. Understanding IPO lot size is fundamental: it determines how much money you need to apply, whether you can apply in the retail category, and what your total investment will be if you are allotted shares.
What Is an IPO Lot?
An IPO lot is the minimum number of shares you can apply for in a single application. All bids must be in multiples of this lot size — you cannot bid for half a lot or 1.5 lots. If the lot size is 65 shares, you can apply for 65, 130, 195 shares, and so on, but not 70 or 100.
Lot sizes are fixed by the company and approved by SEBI as part of the IPO filing. They are announced in the DRHP (Draft Red Herring Prospectus) and confirmed in the final RHP before the issue opens.
Why Does a Lot Size Exist?
SEBI mandates that the minimum application value for retail investors in a mainboard IPO should be approximately ₹15,000. This prevents applications for a single share worth ₹10, which would create an administrative burden for registrars processing millions of applications.
The lot size is calculated to land as close to this ₹15,000 minimum as possible at the upper end of the price band. For example, if an IPO has a price band of ₹220–₹230, the lot size would be set at roughly 65 shares (65 × ₹230 = ₹14,950 — just under the ₹15,000 threshold).
How to Calculate Lot Size Investment
The formula is straightforward:
- Minimum investment = Lot size × Upper price band
- Maximum retail investment = Maximum lots allowed × Lot size × Upper price band
Example — Tata Technologies IPO (₹475–₹500 price band, lot size 30):
- Minimum investment: 30 × ₹500 = ₹15,000
- Maximum retail investment: 14 lots × 30 × ₹500 = ₹2,10,000
Retail investors (those applying for ₹2 lakh or less) can apply for a maximum of ₹2 lakh worth of shares. The exchange calculates the maximum number of lots that fits within this limit.
SME IPO Lot Sizes Are Very Different
SME IPOs listed on BSE SME and NSE Emerge have much larger minimum lot sizes. SEBI requires the minimum application value for SME IPOs to be at least ₹1 lakh, and in practice most SME IPOs set minimums of ₹1–2 lakh per lot.
This means SME IPO investing requires significantly more capital upfront per application than mainboard IPOs. A retail investor applying for a SME IPO at a ₹1.5 lakh minimum lot needs to block that entire amount during the subscription window.
Mainboard vs SME — Lot Size Comparison
- Mainboard: Minimum ~₹15,000 per lot · Maximum retail bid ~₹2 lakh · Lottery allotment
- SME: Minimum ₹1–2 lakh per lot · No sub-₹2L retail category · Proportional allotment
How Many Lots Should You Apply For?
In the retail category of mainboard IPOs, the number of lots you apply for does not affect your allotment probability. The retail allotment is a lottery — every applicant who bids at or above the cut-off price has an equal chance of receiving one lot, regardless of whether they bid for 1 lot or 14 lots.
This is a common misconception. Applying for 14 lots does not give you 14 times the chance of allotment. It simply means that if you win the lottery, you will receive 14 lots instead of 1 — but the probability of winning is identical to someone who applied for 1 lot.
Given this, the standard advice for retail investors is:
- Apply for the maximum number of lots (up to ₹2 lakh) only if you are happy to hold that full position if allotted
- Apply for 1 lot if you want exposure with minimum capital at risk
- For high-demand IPOs where you expect low allotment odds, apply from multiple family members' accounts (one per PAN) — this is the only legitimate way to improve household allotment probability
Where to Find the Lot Size Before Applying
The lot size is published in several places:
- IPOLyst IPO detail pages — shown prominently in the key details card
- BSE/NSE IPO listing pages for the specific issue
- Your broker app — Zerodha, Groww, Angel One, and others show lot size in the IPO application screen
- The IPO DRHP on SEBI's EDGAR platform
Related Reading
- How to Apply for an IPO in India: Step-by-Step Guide — full walkthrough of the UPI ASBA application process
- IPO GMP Today: What Is Grey Market Premium and How to Use It — GMP is expressed per share — knowing the lot size helps you calculate total expected listing gain
- IPO Listing Day Strategy: Sell on Day 1 or Hold? — once allotted, your lot size determines your total position and the sell-or-hold decision
Disclaimer
This article is for informational purposes only and does not constitute financial advice. IPOLyst is not a SEBI-registered investment advisor. Please conduct your own research before investing.