What is IPO Lot Size? A Beginner’s Guide to Smart IPO Investing
By CapitalKeeper | Beginner’s Guide | Indian Sock Market | Market Moves That Matter I 05th July 2025
As Indian investors show increasing enthusiasm for Initial Public Offerings (IPOs), it’s essential to understand one of the most basic yet critical concepts: the IPO lot size. Whether you’re a beginner or a seasoned investor applying through platforms like Zerodha, Groww, or Upstox, understanding lot size can help you make smarter IPO investment decisions.
Definition: What is IPO Lot Size?
IPO lot size refers to the minimum number of shares you must apply for in an IPO. You cannot apply for just 1 or 2 shares; you must bid in multiples of the lot size as defined in the offer document.
🔹 Example:
If the IPO lot size is 30 shares, and the price band is ₹100–₹105, your minimum investment would be:
- ₹100 x 30 = ₹3,000 (lower band)
- ₹105 x 30 = ₹3,150 (upper band)
📌 Why Does Lot Size Exist?
Lot size is designed to:
- Standardize the bidding process
- Ensure fair distribution across retail, HNI, and institutional categories
- Maintain manageable application sizes for registrar & exchange
How is IPO Lot Size Determined?
The lot size is decided by the company and the book-running lead managers (BRLMs) in consultation with SEBI, based on:
- IPO price band
- Retail investor affordability (SEBI requires the minimum investment to be within ₹10,000–₹15,000 for retail)
- Total number of shares being offered
- Face value and market appetite
💡 Retail vs HNI vs Institutional Investors: Lot Size Impact
| Investor Category | Minimum Investment | Lot Size Applies? | Application Method |
|---|---|---|---|
| Retail Investor | ₹10,000–₹15,000 | Yes ✅ | ASBA / UPI / Bank |
| HNI (High Net Worth) | ₹2 lakhs+ | Yes ✅ | ASBA only |
| Institutional | ₹10 crores+ (typical) | No (block deals) ❌ | Anchor / QIB route |
📈 Can You Apply for More Than One Lot?
Yes, retail investors can apply for up to ₹2 lakhs worth of shares. If one lot is worth ₹15,000, you can apply for 13 lots max (₹15,000 x 13 = ₹1,95,000).
However, applying for more lots doesn’t guarantee allotment. IPOs with high oversubscription often go to lucky draw/lottery systems.
What Happens If You Don’t Get Allotted?
- The IPO registrar will refund the blocked amount (usually within 5 working days).
- No interest is paid for the blocked duration.
- You can reapply in future IPOs.
Pro Tip from a Financial Advisor
Always calculate your exposure and stick to a budget. Just because you can apply for 13 lots doesn’t mean you should. Focus on the business model, valuations, and growth prospects of the IPO rather than overbidding.
📌 Real-World Example: Tata Technologies IPO
- Price Band: ₹475–₹500
- Lot Size: 30 shares
- Minimum Investment: ₹15,000
- Retail Max: ₹1,95,000 (13 lots)
How to Check Lot Size Before Applying
- Visit SEBI’s official website
- Check on your broker’s IPO section (Zerodha, Groww, AngelOne, etc.)
- Look into the company’s Red Herring Prospectus (RHP)
- View recent IPO announcements on BSE/NSE websites
📌 Conclusion: IPO Lot Size is the Foundation of Smart IPO Investing
Lot size may seem like a technicality, but it plays a crucial role in capital planning, application strategy, and risk management. For retail investors, understanding lot size helps align IPO investments with your financial goals and expectations.
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