By BillCut
Last updated: 6 November 2026
IPO price band and lot size explained simply: the price band is the range, from a floor price to a cap price, within which investors can bid for shares in a book-built IPO. The lot is the minimum number of shares you must bid for, and the company states it in its offer document. This page is for learning. It does not name any IPO, does not discuss grey market talk and does not suggest whether anyone should apply.
What is a price band in an IPO?
In a book-built issue, the company and its lead managers set a range for bids. The lower end is called the floor price and the upper end is the cap price. The SEBI investor page on book building gives an example of a band such as Rs 120 to Rs 144 per share, and states that the cap cannot exceed 20 percent of the floor price. The final issue price is found after demand is seen, and it falls within the band.
The same page notes that a company can revise the band during the offer, and that a revision comes with a mandatory extension of the bidding period. Always read the latest notice from the company and the exchange.
What is a lot size in an IPO?
Bids are placed in lots, not single shares. A lot is a fixed number of shares, and a bid must be for one lot or a multiple of it. The lot size is stated in the offer document and in the public notices of that issue. It is not the same for every company, so check it for the issue you are reading about. The NSE guide to investing in an IPO explains the basics of the process.
How do price band and lot size work together?
The money needed for one lot is the lot size multiplied by the price per share. Because the price can sit anywhere in the band, the amount for a lot is a range too.
Illustrative example with made up numbers. Say a band is Rs 100 to Rs 120 and the lot is 100 shares.
| Item | At floor price | At cap price |
|---|---|---|
| Price per share (illustrative) | Rs 100 | Rs 120 |
| Shares in one lot (illustrative) | 100 | 100 |
| Amount for one lot | Rs 10,000 | Rs 12,000 |
| Amount for two lots | Rs 20,000 | Rs 24,000 |
The band in this example is 20 percent above the floor, which is the highest the rule allows. Real bands and lots differ for each issue, so do not use these numbers for any real decision.
What is the cut-off price?
The NSE guide says only retail individual bidders may bid at the cut-off price. A cut-off bid stays valid whatever final price is set within the band. That is why a bidder who picks the cut-off should keep funds ready for the cap price, since that is the most per share that could be asked for.
What should you read before bidding in any IPO?
- The offer document and the price band notice, which carry the facts about the issue.
- The lot size and the minimum amount for one lot at the cap price.
- The dates the issue opens and closes, and the listing date.
- How shares are allotted. If an issue is oversubscribed, you may get fewer shares than you bid for, and the unused money is released.
- The risk factors section of the document, which sets out what could go wrong.
The NSE guide also mentions UPI based ASBA for retail investors for bids up to Rs 2,00,000. Your bank or broker shows how it works in practice. The regulator is SEBI and the exchange site is NSE India. BSE also publishes IPO notices on its own site.
What are the risks of an IPO?
Shares can list below the issue price, and the price can move sharply after listing. You can lose some or all of the money you put in. Talk of unofficial grey market prices is not an official source and says nothing reliable about the issue, so this page does not quote any such figure. Facts about an issue come from the offer document, the exchanges and SEBI.
Before you commit money to an IPO, check that your own debts are in order. Money tied up in a bid is money you cannot use for EMIs. Our posts on fintech IPOs on Dalal Street, what metrics matter for IPO ready fintechs and EMI planning for salaried Indians give wider background.
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Frequently asked questions
What is a price band in an IPO?
It is the range between a floor price and a cap price within which investors can bid in a book-built issue. The final price is set within it.
How wide can a price band be?
SEBI investor material states that the cap cannot exceed 20 percent of the floor price. Check the notice of each issue.
What is a lot size in an IPO?
It is the minimum number of shares in one bid. You bid for one lot or a multiple of it. The offer document states it.
How do I find the amount needed for one lot?
Multiply the lot size by the price per share. Use the cap price to see the most you may need to keep ready.
Is the lot size the same for every IPO?
No. It is set for each issue and stated in its offer document and public notices.
Does a price band tell me if an IPO is a good one?
No. A band is only the bidding range. It says nothing about future price or returns, and this page does not advise anyone to apply.
Where do I find reliable facts about an IPO?
Use the offer document, the exchange websites and SEBI. Unofficial grey market chatter is not a reliable source.
Disclaimer: This page is for education only. It is not investment, tax or legal advice. It names no IPO and does not suggest buying, selling, holding or applying. Investments in securities are subject to market risks, and you can lose money. Read the offer document carefully. All numbers in the example are illustrative.
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