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June 14, 2026
The Dispatch

Definition

Lot Size (IPO)

Lot size is the minimum number of shares an investor must apply for in an IPO, and the multiple in which further bids must be made.

IPO shares are applied for in fixed lots rather than single shares. SEBI sets the minimum application value for retail investors at roughly ₹14,000–₹15,000, and the lot size is calculated so one lot falls in that range. Retail investors can apply for up to the number of lots that keeps their bid within ₹2 lakh.

For SME IPOs, the lot size is much larger (a higher minimum value), deliberately keeping out the smallest investors. The lot size is disclosed in the RHP and is the unit used in the basis of allotment lottery.

Related terms

  • Retail Individual Investor (RII)An RII is an individual investor applying for up to ₹2 lakh in an IPO, who gets a reserved quota and can bid at the cut-off price.
  • Basis of AllotmentThe basis of allotment is the formula, approved by the exchange, that decides how shares are distributed among applicants when an IPO is oversubscribed.
  • SME IPOAn SME IPO is a public issue by a small or medium enterprise listed on a dedicated exchange platform with relaxed eligibility but higher minimum investment.

Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.