IPO Lot Size

IPO lot size is the minimum shares you must apply for in an IPO in India. Retail investors can apply for one or more lots, with a minimum investment of ₹10,000–₹15,000.
OPEN ACCOUNT
What is the Lot Size in an IPO
IPO Lot Size
3 min
06-Feb-2026

Initial Public Offers (IPOs) are popular investment events in the financial markets. In 2023, there were 60 mainboard IPOs, with the total IPO fundraising for the full year (2023) being Rs. 53,091 crore. Central to the IPO process is the concept of lot size, which represents the minimum quantity of shares an investor must purchase in a single transaction.

Let us understand the concept of IPO lot size in detail and see how it democratises market access for retail investors.

What is a lot size in IPO?

IPO lot size refers to the minimum number of shares an investor must purchase in a single transaction during the IPO process. For instance, if the IPO lot size for XYZ company is 28 shares, with a price range of ₹480 to ₹500, the minimum investment required would be ₹14,000 (28 * ₹500). All applications must be submitted in multiples of the lot size.

Usually, a lot size is predetermined by the company issuing the IPO and varies from one IPO to another. It depends on factors such as:

  • Price of the shares
  • Total number of shares offered, and
  • Regulatory requirements.

Pro tip

Invest in equities, F&O, and upcoming IPOs effortlessly by opening a Demat account online. Enjoy a free subscription for the first year with Bajaj Broking.

demat

Types of lot sizes in an IPO

1. Minimum lot size

The minimum lot size in an IPO refers to the smallest number of shares an investor can buy. Investors cannot purchase fewer shares than the specified minimum lot size. This helps issuers ensure that only committed investors take part in the IPO. For example, if a company’s IPO has a lot size of 100 shares and the minimum requirement is three lots, the investor must buy at least 300 shares to participate.

2. Maximum lot size

The maximum lot size in an IPO sets a limit on how many shares an investor can buy. This prevents any single investor from monopolising the shares. By capping the maximum lot size, companies ensure that the shares are distributed among a wide range of investors.

Calculation of IPO lot size

Companies calculate lot size using this formula:
For example,

  1. Total number of shares: 1,000,000
  2. Minimum lot size: 100 shares per lot
  3. Total lots issued = Total number of shares / Minimum lot size
  4. Total lots issued by the company = 1,000,000 / 100
  5. Total lots issued = 10,000 lots

Why Lot Size Matters in an IPO?

Lot size in an IPO determines the minimum number of shares you must apply for, directly affecting the total investment amount required. It ensures fair allocation among investors, prevents excessive concentration, and standardises bidding. Lot size also influences application strategy, oversubscription chances, and capital planning, especially for retail investors working within defined investment limits and eligibility criteria.

Why companies decide IPO lot size?

One of the primary benefits of lot sizes is that they make IPOs accessible to retail investors by setting a minimum quantity of shares that can be purchased. This accessibility democratises the IPO market and allows individual investors to participate alongside institutional investors.

Furthermore, IPO lot sizes help in:

  • Efficient allocation
    • Using lots, an issuer can efficiently allocate shares among investors based on their orders and demands.
  • Orderly trading
    • Standard lot sizes facilitate orderly trading in the secondary market once the shares are listed.
    • They provide a standardised unit of trading and help in maintaining:
      • Market liquidity and
      • Price stability

How do companies calculate IPO lot size?

The calculation of an ideal IPO lot size is based on several factors. Let us have a look at some major ones:

  • Share price
    • Companies consider the price per share they intend to offer in the IPO.
    • Higher share prices usually result in bigger lot sizes to maintain accessibility for retail investors.
  • Total number of shares offered
    • Companies determine the total number of shares they plan to offer in the IPO.
    • This decision largely depends on the funding needs of the organisation.
  • Regulatory requirements
    • Companies are required to adhere to regulatory guidelines and requirements regarding IPO lot sizes.
    • Regulatory bodies usually:
      • Specify minimum lot size thresholds or
      • Guide on determining lot sizes
  • Market conditions
    • To determine an appropriate lot size, most companies assess:
      • Market conditions
      • Investor demand, and
      • Trading liquidity
  • Investor participation
    • To understand the demand or interest for their IPO, companies analyse:
      • Investor interest, and
      • Participation levels
    • This information also helps in deciding a lot size, which can:
      • Attract sufficient investor participation and
      • Avoid oversupplying the market

Lot Size for Different Types of Investors

Lot size in an IPO varies based on investor categories defined by market regulations. Each category has distinct investment limits and allocation rules to ensure balanced participation and fair distribution of shares across investor segments.

  1. Retail individual investors (RII)
     Retail investors can apply for IPO shares up to a prescribed monetary limit. The lot size determines the minimum investment required and ensures retail participation remains accessible while maintaining equal allotment opportunities during oversubscription.

  2. Non-institutional investors (NII/HNI)
     NIIs apply for larger ticket sizes beyond the retail limit. Lot size influences capital deployment, bidding strategies, and allotment probability, especially since allocation depends on proportional distribution rather than lottery-based systems.

  3. Qualified institutional buyers (QIB)
     QIBs include mutual funds, banks, and insurance companies. Lot size is less restrictive for them, as they place bulk bids. Their participation provides price discovery, stability, and confidence during the IPO process.

How much value of shares can you apply in an IPO?

The value of shares you can apply depends on the lot size and the cut-off price in IPO. Furthermore, you should also consider the different limits set by The Securities Exchange Board of India (SEBI) to categorise investors into the following:

  • Retail investors
  • Non-institutional investors (NIIs), and
  • Qualified institutional buyers (QIBs)

These limits are specified under Schedule V to the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018. Let us study them:

Investor type Limit
Retail investors Retail investors are those who apply for shares in an IPO for a total value of up to Rs. 2 lakh.
Non-institutional investors (NIIs) Non-institutional investors (NIIs) are those who apply for shares in an IPO for a total value exceeding Rs. 2 lakh.
Qualified institutional buyers (QIBs)
  • Qualified institutional buyers (QIBs) are those who are registered as:
    • Foreign portfolio investors (FPIs)
    • Mutual funds
    • Venture capital funds
    • Insurance companies
    • Provident funds
    • Pension funds, and
    • Other institutional investors
  • The limit for QIBs in an IPO is 75% of the total issue size.


Conclusion

An IPO lot size shows the minimum investment an investor must make to participate in the IPO. These sizes are pre-determined by the issuing organisation and are based on several factors, such as investor demand, share price offered, and regulatory requirements. These promote accessibility of retail investors in the process of IPO and also ensure efficient allocation and orderly trading in the secondary market.

Related Articles:

Disclaimer

1. Bajaj Finance Limited (“BFL”) is a Non-Banking Finance Company (NBFC) and Prepaid Payment Instrument Issuer offering financial services viz., loans, deposits, Bajaj Pay Wallet, Bajaj Pay UPI, bill payments and third-party wealth management products. The details mentioned in the respective product/ service document shall prevail in case of any inconsistency with respect to the information referring to BFL products and services on this page.

2. All other information, such as, the images, facts, statistics etc. (“information”) that are in addition to the details mentioned in the BFL’s product/ service document and which are being displayed on this page only depicts the summary of the information sourced from the public domain. The said information is neither owned by BFL nor it is to the exclusive knowledge of BFL. There may be inadvertent inaccuracies or typographical errors or delays in updating the said information. Hence, users are advised to independently exercise diligence by verifying complete information, including by consulting experts, if any. Users shall be the sole owner of the decision taken, if any, about suitability of the same.
For customer support, call Personal Loan IVR: 7757 000 000

Frequently asked questions

Can I apply for 10 lots in an IPO?

Yes, you can apply for 10 lots in an IPO, provided the total application value remains within the retail investor limit of ₹2,00,000. However, IPO allotment is not guaranteed. In oversubscribed issues, shares are usually allotted through a lottery system or proportionate basis.

Can I buy less than 1 lot?
No. An IPO lot size shows the minimum number of shares an investor has to purchase.
How much do I need to pay for 1 lot in an IPO?

The amount required for one IPO lot depends on the lot size and the cut-off price. For instance, if one lot has 100 shares priced at ₹250 each, you need to apply for ₹25,000. This amount is blocked in your bank account until allotment.

How many shares can I purchase as a retail investor?

As per SEBI guidelines, you qualify as a retail investor if your total IPO application value does not exceed ₹2,00,000. The number of shares you can apply for depends on the IPO price and lot size, as long as the total investment stays within this limit.

Can I apply for more than one lot?

Yes, you can apply for more than one lot in an IPO, provided your total application amount does not exceed ₹2,00,000 under the retail category. You must apply in multiples of the lot size. Applying for more lots does not guarantee higher allotment.

What happens if the IPO is oversubscribed?

When an IPO is oversubscribed, it means demand exceeds the number of shares available. In such cases, retail investors usually receive allotment through a lottery system or on a proportionate basis, as per SEBI rules. Some applicants may not receive any shares.

Is the lot size the same for all IPOs?

No, the lot size is not the same for all IPOs. Each company sets its own lot size based on the issue price, share structure, and regulatory requirements. Lot sizes vary to ensure retail participation remains within the ₹2,00,000 investment limit.

Who decides the lot size?

The lot size is decided by the issuing company in consultation with its merchant bankers and approved by SEBI. It is structured to ensure affordability for retail investors while complying with regulatory norms and facilitating smooth allocation during the IPO process.

Show More Show Less

Related videos

Bajaj Finserv App for all your financial needs and goals

Trusted by 50 million+ customers in India, Bajaj Finserv App is a one-stop solution for all your financial needs and goals.

You can use the Bajaj Finserv App to:

Apply for loans online, such as Instant Personal Loan, Home Loan, Business Loan, Gold Loan, and more.

  • Explore and apply for co-branded credit cards online.
  • Invest in fixed deposits and mutual funds on the app.
  • Choose from multiple insurance for your health, motor and even pocket insurance, from various insurance providers.
  • Pay and manage your bills and recharges using the BBPS platform. Use Bajaj Pay and Bajaj Wallet for quick and simple money transfers and transactions.
  • Apply for Insta EMI Card and get a pre-approved limit on the app. Explore over 1 million products on the app that can be purchased from a partner store on Easy EMIs.
  • Shop from over 100+ brand partners that offer a diverse range of products and services.
  • Use specialised tools like EMI calculators, SIP Calculators
  • Check your credit score, download loan statements, and even get quick customer support—all on the app.

Download the Bajaj Finserv App today and experience the convenience of managing your finances on one app.

Do more with the Bajaj Finserv App!

UPI, Wallet, Loans, Investments, Cards, Shopping and more

GET THE APP

Disclaimer

Standard Disclaimer

Investments in the securities market are subject to market risk, read all related documents carefully before investing.

Broking services offered by Bajaj Financial Securities Limited (Bajaj Broking). Reg Office: Bajaj Auto Limited Complex, Mumbai –Pune Road Akurdi Pune 411035. Corporate Office: Bajaj Financial Securities Limited, 1st Floor, Mantri IT Park, Tower B, Unit No 9 & 10, Viman Nagar, Pune, Maharashtra 411014. SEBI Registration No.: INZ000218931 | BSE Cash/F&O/CDS (Member ID:6706) | NSE Cash/F&O/CDS (Member ID: 90177) | DP registration No: IN-DP-418-2019 | CDSL DP No.: 12088600 | NSDL DP No. IN304300 | AMFI Registration No.: ARN –163403.

Details of Compliance Officer: Mr. Harinatha Reddy Muthumula (For Broking/DP/Research) | Email: compliance_sec@bajajbroking.in/Compliance_dp@bajajbroking.in | Contact No.: 020-4857 4486 |

This content is for educational purpose only. Securities quoted are exemplary and not recommendatory.

Research Services are offered by Bajaj Financial Securities Limited as Research Analyst under SEBI Registration No.: INH000010043.

For more disclaimer, check here: https://www.bajajbroking.in/disclaimer