Lot size is the minimum number of shares an investor must bid for in an IPO. SEBI mandates that retail investors apply in multiples of one lot, and the lot size is set so that one lot falls in the ₹10,000–₹15,000 range. You cannot bid for fewer than one lot or a fractional lot.
Minimum Investment = Lot Size × Issue Price
How allotment works
If a retail IPO is oversubscribed, SEBI requires allotment by lottery — each applicant gets either one lot or zero (not a proportional fraction). This means applying for more lots does not improve your chances of getting at least one; it only improves your chances of getting multiple lots.
Why it matters for unlisted shares
Lot size sets the effective entry cost of an IPO. When a pre-IPO investor exits at listing, they sell freely on the exchange without lot-size constraints — unlike IPO applicants. Understanding lot size also helps you compare the IPO's pricing against the unlisted market price you may have paid earlier.
Example: An IPO at ₹420/share with a lot size of 35 requires a minimum application of ₹14,700 — one bid in the retail category.