Standardized lot size for SME Exchange / Platform
Summary
SEBI mandates standardized lot sizes for SME exchange listings and secondary trading based on specific price bands. The circular requires stock exchanges to ensure consistency in lot sizes across platforms and prohibits reducing lot sizes below the initial IPO level if trading prices fall. Stock exchanges are instructed to amend bye-laws, disseminate information, and report implementation status to SEBI.
Text
standardize the lot size for Initial Public Offer proposing to list on SME exchange/platform and for the secondary market trading on such exchange/platform, as given under: Price Band (in Rs) Lot Size (No of shares) Upto 14 10000 more than 14 upto 18 8000 more than 18 upto 25 6000 more than 25 upto 35 4000 more than 35 upto 50 3000 more than 50 upto 70 2000 more than 70 upto 90 1600 more than 90 upto 120 1200 more than 120 upto 150 1000 more than 150 upto 180 800 more than 180 upto 250 600 more than 250 upto 350 400 more than 350 upto 500 300 more than 500 upto 600 240 more than 600 upto 750 200 More than 750 upto 1000 160 above 1000 100
Registrar to Issue in consultation with Merchant Banker/s, Issuer and the Stock Exchange shall ensure to finalize the basis of allotment in minimum lots and in multiples of minimum lot size... The secondary market trading lot size shall be the same, as shall be the IPO Lot Size at the application/allotment stage
At the Initial Public Offering stage if the price band decided, falls within two different price bands than the minimum application lot size shall be decided based on the price band in which the higher price falls into.
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 Stock Exchanges can review the lot size once in every 6 months / wherever warranted, by giving an advance notice of at least one month to the market.
the stock exchanges shall ensure that the lot size shall be the same for a securities traded across the Exchanges.
In case of oversubscription, if the option to retain ten percent 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.
All the Stock Exchanges are advised to : i. make necessary amendments, if any, to the relevant bye laws, rules and regulations for the implementation of the above decision; ii. disseminate the same on their website for easy access to the issuers and other market participants; iii. communicate to SEBI, the status of implementation of the provisions of this circular in the Monthly Development Report.
This Circular is issued in exercise of the powers conferred under Section 11 (1) of the Securities and Exchange Board of India Act, 1992, read with Section 10 of the Securities Contracts (Regulation) Act, 1956... and shall come into effect immediately.
Source: SecMarx — Standardized lot size for SME Exchange / Platform. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.