In an IPO or initial public offering, investors must bid for multiple shares at once, also known as lots.
At the time of launching an IPO, a company provides all key details about the IPO in the RHP (Red Herring Prospectus). It also includes information on the lot sizes that each category of investors can invest in or bid for. The available shares in each category especially the retail investors’ category are pooled together and split into lots of specified numbers of shares. Investors can therefore subscribe to the IPO for a minimum of 1 lot or maximum permissible lots (usually 13 lots for retail investors). The number of shares in each lot is determined by the company and other intermediaries of the IPO like the merchant bankers.
