When a new company goes public, the excitement is real. Social media is buzzing, friends are talking about applying, and everyone wants to know if they’ll “get the allotment.” But the moment you open your broker app and see words like lot size, it feels a bit confusing.
You might wonder: what is the lot size in an IPO and why can’t you just buy one share? Why must you buy in blocks? It feels a little unfair at first, but there’s actually a reason behind it.
Think of it like buying movie tickets. The theatre won’t sell you just half a seat or one-third of a row. You book in sets that make sense for the management system. IPOs work the same way, you apply in “lots.” This is the building block of any IPO application.
Let’s break it down clearly.
What Is Lot Size in an IPO?
Lot size in an IPO means the minimum number of shares bundled together that you have to apply for purchase. You cannot pick a random number like 7 or 15 shares during the IPO. Your application has to match the fixed lot set by the company and approved by SEBI.
For example, if the lot size is 100 shares, that’s your entry ticket. One lot = 100 shares. Two lots = 200 shares. And so on.
This system keeps IPO applications uniform. Imagine lakhs of people applying for all sorts of different share numbers, it would be chaos for the system. Lot size is like a rulebook that keeps things fair, organised, and easy to allot.
Why Lot Size Matters in IPOs
At first glance, lot size looks like a technicality. But it actually shapes your entire IPO experience. Here’s why:
- It fixes your minimum spend. Without a lot size, some people might apply with tiny amounts while others might overbid. With lots, everyone has a clear entry amount.
- It keeps things fair. Institutional investors with deep pockets cannot apply in odd ways to crowd out retail investors. Everyone is bound by the same lot multiples.
- It makes the allotment smoother. Because applications are structured, the registrar can easily divide shares and handle oversubscription.
- It helps you budget. When you know the lot size and price, you can immediately calculate if this IPO fits your wallet or not.
In other words, lot size is not just a random number, it is the foundation of how IPO participation works.
Components of Lot Size
Lot size is usually spoken of in two ways:
Minimum Lot Size
This is the smallest chunk of shares you can apply for. You cannot go below this. In most Indian IPOs, regulators make sure this entry point stays reasonable for retail investors. That’s why you will notice the minimum investment is often between ₹14,000 and ₹15,000.
Take an example: if the issue price is ₹200 and the lot size is 75 shares, your minimum investment is ₹15,000 (200 × 75). That’s the cost of just one lot.
Maximum Lot Size
Retail investors also have a ceiling. You cannot apply endlessly. Currently, the maximum investment allowed for retail in one IPO is ₹2,00,000.
So how many lots can you go for? That depends on the cost of one lot. If one lot is worth ₹15,000, the maximum you can go for is 13 lots (₹1,95,000). Apply for more, and you move out of the retail category and into the HNI bucket.
These two rules: minimum and maximum, create a fair playing field for small investors and big players alike.
How Lot Size Is Determined
This part often confuses people. Who decides that Nykaa’s lot will be 12 shares while Zomato’s lot will be 195?
Here’s how it works:
- Price per share: If the IPO share price is high, the lot size is kept small so the minimum investment is still affordable. If the share price is low, the lot size is kept larger. The idea is to keep the entry ticket roughly similar across IPOs.
- Regulatory range: SEBI ensures that the minimum investment for mainboard IPOs is set in a band that works for retail: ₹10,000–₹15,000.
- Company preference: Issuers, with guidance from investment bankers, also shape the lot size based on how much demand they expect and how they want to structure retail participation.
So in practice, it is not random at all, it is a balancing act between accessibility and practicality.
Minimum Investment Calculation
This one is simple math. Your minimum investment is:
Minimum Investment = Lot Size × Issue Price (Upper Band)
Why the upper band? Because when you apply at “cut-off,” the system blocks funds at the highest price. If the final issue price is lower, the extra money gets released back to your account.
Example:
If a company’s IPO lot size is 44 and the upper price is ₹340,
Minimum Investment = 44 × 340 = ₹14,960
So, ₹14,960 is the lowest amount you need to even get your foot in the IPO door.
This is why IPO news always share both “lot size” and “price band” together, they tell you the real amount required.
Lot Size in Context: Order Quantity & Market Lot
Now, two more terms often float around: minimum order quantity and market lot. Both sound similar but mean slightly different things.
- Minimum Order Quantity (MOQ): This is simply another way of saying “lot size.” It’s the smallest order you can place during the IPO. Since 1 lot is the minimum investment, the MOQ equals the number of shares in a lot. For example, if 1 lot has 75 shares, the MOQ is 75.
- Market Lot: Once the shares get listed, you can buy and sell freely. For mainboard IPOs, the market lot is usually 1 share. That means you can trade even a single share after listing. But in SME IPOs, market lots often stay larger, sometimes requiring trades in multiples like 100 or 1,000 shares.
So, lot size matters during the IPO application stage, while market lot matters once the stock hits the exchange.
Examples of Lot Size in Recent IPOs
A few fresh examples help make sense of these numbers:
| Company | Lot Size | Issue Price (Upper) | Min Investment |
| Patel Retail Limited | 58 | ₹255 | ₹14,790 |
| Vikram Solar Limited | 45 | ₹332 | ₹14,940 |
| Regaal Resources Limited | 144 | ₹102 | ₹14,688 |
| Bluestone Jewellery and Lifestyle Limited | 29 | ₹517 | ₹14,993 |
| JSW Cement Limited | 102 | ₹147 | ₹14,994 |
Conclusion
Lot size in an IPO may look like a small detail, but it plays a big role in how investors enter the market. It sets the minimum ticket size, keeps the process fair, and ensures that everyone applies in an organised way.
Once you know the lot size and price band, it is much easier to judge if the IPO fits your budget and goals. Think of it as the entry pass, you can’t join the game without it.
So before rushing to apply for the “next big IPO,” take a moment to check the lot size. That one number can tell you a lot about affordability, access, and whether the opportunity makes sense for you.
FAQs
IPO lot size is set by the company and approved by SEBI. It depends on the share price, issue size, and the goal of keeping minimum investment affordable for small investors, usually around ₹10,000–₹15,000.
One lot in an IPO means the minimum number of shares you can apply for. It differs for every IPO. Sometimes one lot is 12 shares, other times 100 or more, depending on the share price.
Lot size ensures investors apply in fixed groups of shares instead of random numbers. It keeps the IPO process structured, fair, and manageable. Without it, allotments would be confusing and uneven across investors.
If an IPO is oversubscribed, more people want shares than the company can issue. In that case, allotment is done through a lottery system or proportionately, giving every investor a fair chance of receiving shares.
No, lot size is different for every IPO. It depends on the share price and how the company sets the issue. The aim is to keep the minimum investment affordable, so the lot size varies.
