SME Exchange: SEBI prescribes lot size for IPOs

NEW DELHI, INDIA: Market regulator Securities and Exchange Board of India (SEBI) on Tuesday prescribed 'lot sizes' for shares being offered in the IPO on BSE SME exchange, as per the price band of the public offers.

In a circular, it also said that at an IPO stage, if the decided price band falls within two different price bands then the minimum application lot size shall be decided based on the price band in which the higher price falls into.

"It has been decided to standardise the lot size of an IPO to list on the SME exchange and for the secondary market trading on such platforms," SEBI said in a circular.

It said that upto the price band of Rs 14, the lot size will be 10,000. For price band of over Rs 14 and below Rs 18, the lot size would be 8,000 shares.

"The lot size shall not be reduced by the exchange to below the initial lot size if the trading price is below the IPO issue price," the circular said.

The stock exchanges can review the lot size once in every six months by giving an advance notice of at least one month to the market, it said.

In case of over-subscription, if the option to retain 10 per cent of the net offer to public for the purpose of making allotment in minimum lots is exercised, then it shall be ensured by the Issuer/Stock Exchanges/ Merchant Bankers that the post issue paid up capital of the issuer does not go beyond Rs.25 crore, SEBI said.