IPO Lot Size

The lot size is the minimum number of shares that an investor must bid for in order to apply for an IPO.

The IPO application quantity should be in multiples of lot sizes.

For example: Say a company offers to issue 4 lakh shares to investors in a lot size of 25.

In this case, investors have to bid for a minimum of 25 shares that make one lot. If an investor wants to bid for 2 lots, he/she has to apply for 50 shares (25*2). Investors cannot bid for 40 shares as it is not a multiple of 25.

Therefore, it is important to know the lot size to make sure that the bidding is for the correct quantity. This must be a multiple of the lot size, otherwise, the application would be rejected.

Answered on 2023-06-22