Minimum investment in an SME IPO

Applies now: Vedant Poly Fabs, allotment out · lists 9 Nov. See 1 more

The rule in one line

An individual investor in an SME IPO must bid for at least two lots, and the bid must be worth more than ₹2 lakh.

This applies to SME IPOs opening on or after 1 July 2025, on BSE SME and NSE Emerge. It follows SEBI’s 2025 changes to the rules for SME issues, and the exchanges’ circulars that put them into practice.

Why SME IPOs have a high minimum

SME IPOs are small companies raising small amounts, often ₹10 crore to ₹100 crore. They carry more risk than mainboard IPOs, and their shares can be hard to sell after listing.

A high minimum keeps SME IPOs for investors who can put a larger amount at risk. The rule applies to each application, so each family member applying from their own demat account needs their own two-lot amount. SEBI raised the minimum in 2025 as part of a wider tightening of the rules for SME issues.

What changed in July 2025

These come from NSE’s circular of 18 June 2025, and the same process applies on BSE SME.

A worked example

Here are the minimum bids in recent SME IPOs, from the exchange notices. The amounts are our calculation at the upper price.

Take Antala Industries. One lot is 2,000 shares, worth ₹1,32,000 at ₹66, the upper end of its revised band. One lot alone is below ₹2 lakh, so the minimum is two lots: 4,000 shares and ₹2,64,000.

How bidding works in an SME IPO

1. Find the IPO in your broker’s app or bank’s net banking.
2. Choose two lots or more. The app will not accept one lot from an individual.
3. Enter a price. There is no cut-off box. Many bidders enter the upper end of the band, because a bid below the final price gets nothing.
4. Approve the UPI mandate by 5 pm on the closing day. Two lots are usually within the ₹5 lakh UPI limit.
5. Wait for allotment. You cannot cancel or lower the bid once it is placed.

If the individual portion is oversubscribed, winners are picked by lottery, and each winner gets the minimum application of two lots. See how IPO shares are allotted.

Bidding above the minimum

Individual investors bid for two lots, the minimum application. Bids for more than the minimum are placed in the non-institutional investor (NII) category, along with companies and trusts.

In the NII category, allotment is also in whole lots, starting from the minimum application, and depends on how heavily that category is subscribed. Bidding for more lots does not guarantee more shares.

Qualified institutional buyers, such as mutual funds, have their own portion. Many SME IPOs also have an anchor portion, allotted a day before the issue opens.

After listing: trading in lots

SME shares trade in lots, not single shares. If you were allotted two lots, you can sell one lot or both, but not part of a lot.

Each SME IPO also has a market maker, a broker who must quote buy and sell prices for a set period. Even so, trading can be thin, and the price can move a lot on a few trades.

Because you sell in lots, plan your exit in lots too. Two lots means at most two separate sales, each of a full lot.

A worked sale

Say you were allotted two lots of Antala Industries at ₹66: 4,000 shares that cost ₹2,64,000.

After listing, you can sell 2,000 shares (one lot) or 4,000 shares (both lots). You cannot sell 1,000 shares. If the market price were ₹70, selling one lot would bring ₹1,40,000 before charges, and you would keep 2,000 shares. These are illustrative numbers and our calculation.

Charges on the sale include brokerage, the DP charge, securities transaction tax and exchange fees. Compare them on our brokers page.

What the larger minimum means for risk

A larger minimum means more money moves with each listing. In a mainboard IPO, one lot is about ₹15,000. In an SME IPO, the minimum is more than ₹2 lakh.

Take Core4 Engineers, an SME IPO priced at ₹93 with a lot of 1,200 shares. Two lots cost ₹2,23,200. On its listing day, 30 October 2026, the shares opened on BSE SME at ₹74.40, which is 20% below the issue price. At that price, two lots were worth ₹1,78,560, or ₹44,640 less than was paid. The prices are from BSE, and the amounts are our calculation.

Listing prices can also be far above the issue price. The point is the size of the swing, in rupees, on a single application.

What may change next

On 14 October 2026, SEBI released a consultation paper on the SME framework. Among other things, it proposes:

• a lower minimum application of ₹1 lakh, made up of lots of at least ₹25,000;
• trading in single shares after listing, instead of lots.

These are proposals, not rules. Public comments are open until 4 November 2026. The rules change only if SEBI’s board approves them and SEBI notifies the amendments. We will update this guide if that happens.

What to check before you bid

• The two-lot amount at your bid price, not one lot.
• The exchange and the market maker, shown in the RHP and the exchange notice.
• The things worth checking on the IPO page, from the offer document. SME issues are reviewed by the exchange, not by SEBI.
• How much of the issue is an offer for sale. In SME IPOs, it cannot be more than 20% of the issue.

Common mistakes to avoid

• Planning for one lot. The minimum is two lots, so the amount is double what one lot suggests.
• Expecting a cut-off option. Enter a price; a bid below the final price gets nothing.
• Bidding to decide later. SME bids cannot be cancelled or lowered.
• Assuming you can sell a few shares. You sell a whole lot at a time.
• Treating SME like mainboard. Smaller companies, lighter review and thinner trading mean more risk.

What to do next

Compare the two boards in SME IPO vs mainboard IPO, and see minimum investment in a mainboard IPO. Then look at open and upcoming SME IPOs, each with its two-lot minimum and the things worth checking.

Sources: SEBI (Issue of Capital and Disclosure Requirements) (Amendment) Regulations, 2025, on SME issues; NSE circular NSE/IPO/68604, 18 Jun 2025: individual investors to bid for 2 lots with an application above ₹2 lakh; no cut-off and no downward revision or cancellation; for SME IPOs opening from 1 Jul 2025; SEBI consultation paper on the SME issue framework, 14 Oct 2026 (proposal: ₹1 lakh minimum and single-share trading; comments until 4 Nov 2026); BSE and NSE issue notices for Antala Industries, Vectras Enprocon, Johnsoncab Electricals, HGS (India) and Ajwa Projects (October 2026).

Frequently asked questions