What is Issue Size in IPO – Explained

It’s raining IPOs in India this year, with over ₹2.2 lakh crore being raised across 111 issues in 2025 so far, as investors show up big and liquidity floods the market.

With companies rushing to tap the markets and investors chasing fresh opportunities, one question stands out: Which factors really shape an IPO?

A major piece of the puzzle is its issue size, that is the total value of shares a company offers to the public. Understanding what is issue size in IPO and why it matters helps in decoding the real scale behind these offerings.

Read this blog to know more about IPO issue size, issue size calculation, and IPO valuation.

What is Issue Size?

The issue size of an IPO refers to the total value or amount of shares that a company offers to the public. In an IPO, issue size comprises two components: a fresh issue of new shares to raise capital and an offer-for-sale (OFS) of the existing shares from the current shareholders, which form the total issue size. The issue size of a company may comprise either or both of them.

So, the issue size includes total shares offered by the company, whether new issue or sale of existing shares, multiplied by the price per share at the time of the offering.

It can also refer to the total amount an issuer plans to raise through a bond or other debt issuance.

The formula to calculate issue size is simply to multiply the total number of shares offered by the price per share.

Issue size = Total Shares Offered x Price per share.

Components of Issue Size

The issue size of an IPO comprises two main components, which are the fresh issue or offer-for-sale. Even though an IPO may consist of either one of the two or a combination of both, each serves a different purpose and affects the company’s capital structure differently. 

• Fresh Issue of Shares: A fresh issue means the company is issuing new shares to raise fresh capital from the public. The net proceeds go directly to the company, especially for expansion, debt repayment, working capital, new projects, etc. This raises the company’s equity or capital, which gives the business more financial firepower.
• Offer-for-sale (OFS): An offer-for-sale means the existing shareholders, such as the promoters, early investors, or venture capitalists, sell their holdings through or during an IPO. For which the company doesn’t receive the proceeds, but instead, the selling shareholders get the money. It increases the company’s public free float and liquidity, without providing new capital to the company.
• Total Issue Size: The total issue size is the combination of the fresh issue and the offer for sale, which represents the overall amount being raised through the IPO. A higher issue size may indicate a larger public float and greater market participation, but it also brings in questions about valuation and demand.

How to Calculate Issue Size

There are two methods for issue size calculation, which include multiplying the total shares by the price per share or using the company valuation method. 

Method 1: Using total shares offered and price per share

Issue size = Total issue size x price per share

For example, Shipwaves Online Ltd. launched an IPO of 4,69,60,000 fresh equity shares at a fixed price of ₹12 per share. So the issue size in this case is calculated as 4,69,60,000 shares x ₹12 = ₹5,635.20 lakhs.

Method 2: Using valuation and equity dilution (IPO valuation)

• Step 1: Estimating company valuation

Company valuation = Profit after tax (PAT) x P/E Ratio

Here, profit after tax is adjusted to remove one-time losses or gains and uses the average P/E of the industry.

For instance, Shipwaves Online Ltd.reports a PAT of ₹1,083.77 lakhs for FY 2025. Let’s assume the average industry P/E is 10. So,

Company valuation = ₹1,083.77 lakhs x 10 = ₹108.37 Cr approximately

• Step 2: Calculate issue size

Issue size = Company valuation x Percentage of stake dilution

So, again, assuming the company decided to dilute 20% of its equity,

Issue size = ₹108.37 Cr x (20/100) = ₹21.68 Cr approximately 

Importance of Issue Size

For the company

• Efficiency in fundraising and performance: A measured issue size allows a company to raise the necessary capital for funding its projects while balancing investors’ demand. While new shares dilute ownership, the added capital drives higher future earnings and growth.
• Game plan and risk check: The companies with new issues are observed to have  faster asset and sales growth compared to non-issuing companies. The size of the issue acts as a strategic decision that determines the spread of ownership across new investors or shareholders and shapes the company’s capital structure and authority.

For investors

• Risk, return, and liquidity: A large issue may dilute ownership, but it opens up opportunities for maximum participation. While a fresh issue introduces new capital into the company, an offer for sale (OFS) releases existing shares to the public.
• Market mood and policy guardrails: The issue size sets the image for how the market perceives a company. A large issue signals growth intent, while a smaller one might reflect a measured, steady approach. On the regulatory front, SEBI ensures accessibility through rules so that the overall issue size stays aligned with participation norms.

Real-World Examples

• Orkla India IPO: The ongoing Orkla India IPO of ₹1,667 crore, from 29 October to 30 October 2025, is entirely an Offer for Sale (OFS), with no fresh capital. The pre-issue holding of the promoters is 90% and the post-issue holding is going to be 75%.
• Lenskart IPO: The upcoming Lenskart IPO of ₹7,300 crore, opening on 31 October and closing on 4 November, is supposed to be a combination of fresh issue and OFS of ₹1,200 crore.

Conclusion

Issue size in an IPO is the total value of shares offered to the public, which may cover both fresh shares and existing share sales (OFS). Understanding the issue size calculation and how it ties to IPO valuation gives a sharper lens to the investors to evaluate new listings and assess market demand.

As India’s primary market shows, issue size is a significant piece in a larger puzzle, but a very visible one. With issues numbering in the hundreds and capital running into lakhs of crores, reading these numbers properly can help investors to separate the hype from the substance.

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