What is price range, lot size and cutoff price in an IPO?

1. Price Range: The price range is the minimum and maximum price within which investors can place bids for shares in an IPO. The company sets this range.

2. Cutoff Price: The cutoff price is the final price at which shares are allotted to retail investors. By selecting the cutoff price, investors agree to pay the final price within the price range.

3. Lot Size: Lot size refers to the minimum number of shares an investor must apply for in an IPO. Retail investors can only apply for shares in multiples of this lot size but cannot apply for fewer shares than specified.

Example: If a company launches an IPO with it sets the:

• Price range: ₹ 66 - ₹ 70.
• Cutoff price: ₹ 70 (investors will receive shares at this price).
• Lot Size: 214 shares. Investors cannot bid for 1 share or 100 shares; they must bid for at least 214 shares (1 lot), 428 shares (2 lots), and so on.