Securities and Exchange Board of India
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CIRCULAR
CIR/MRD/DSA/06/2012 February 21, 2012
To
Managing Director / Chief Executive Officer of
Stock Exchanges and their Clearing Houses/Corporations
Dear Sir/Madam,
Sub: Standardized lot size for SME Exchange / Platform
1. SEBI vide circular dated May 18, 2010 prescribed the framework for setting up
of a stock exchange/trading platform by a recognized stock exchange having
nationwide trading terminals for Small and Medium Enterprises (SMEs).
2. In this regard it has been decided to 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
3. At the Initial Public Offer stage the 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, as per
the above given table. The secondary market trading lot size shall be the
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Securities and Exchange Board of India
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same, as shall be the IPO Lot Size at the application/allotment stage,
facilitating secondary market trading.
4. 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. For example: if the
proposed price band is at 24-28 than the Lot size shall be 4000 shares.
5. 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.
6. 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. However, as far as possible the stock exchange shall ensure that odd
lots are not created.
7. Further, the stock exchanges shall ensure that the lot size shall be the same
for a securities traded across the Exchanges
. 8. 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.
9. 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.
10. 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 to protect the interests of
investors in securities and to promote the development of, and to regulate the
securities market and shall come into effect immediately.
11. This Circular is available on SEBI website at
www.sebi.gov.in. Yours faithfully,
Rajesh Kumar D
Deputy General Manager
Tel. No. 2644 9242
Email : rajeshkd@sebi.gov.in
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