By BillCut
Last updated: 6 November 2026<\/p>\n
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.<\/p>\n
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<\/a> 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.<\/p>\n 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.<\/p>\n 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<\/a> explains the basics of the process.<\/p>\n 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.<\/p>\n Illustrative example with made up numbers. Say a band is Rs 100 to Rs 120 and the lot is 100 shares.<\/p>\nWhat is a lot size in an IPO?<\/h2>\n
How do price band and lot size work together?<\/h2>\n
| Item<\/th> | At floor price<\/th> | At cap price<\/th><\/tr>\n |
|---|---|---|
| Price per share (illustrative)<\/td> | Rs 100<\/td> | Rs 120<\/td><\/tr>\n |
| Shares in one lot (illustrative)<\/td> | 100<\/td> | 100<\/td><\/tr>\n |
| Amount for one lot<\/td> | Rs 10,000<\/td> | Rs 12,000<\/td><\/tr>\n |
| Amount for two lots<\/td> | Rs 20,000<\/td> | Rs 24,000<\/td><\/tr>\n<\/table>\n 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.<\/p>\n What is the cut-off price?<\/h2>\nThe 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.<\/p>\n What should you read before bidding in any IPO?<\/h2>\nThe 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<\/a> and the exchange site is NSE India<\/a>. BSE also publishes IPO notices on its own site.<\/p>\n 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.<\/p>\n 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<\/a>, what metrics matter for IPO ready fintechs<\/a> and EMI planning for salaried Indians<\/a> give wider background.<\/p>\n |