IPO
Mainboard vs SME IPO: Risks, Lot Sizes and Rules
Compare mainboard vs SME IPO risks, lot sizes, minimum investment, listing liquidity and rules. Learn what to check before applying for any IPO in India.
WealthDox Editorial · Published 11/11/2026 · 6 min read · Updated 11/11/2026
Mainboard IPO vs SME IPO: Two Kinds of IPOs Explained
- Mainboard
- listed on NSE and BSE main boards
- SME
- listed on dedicated SME platforms
- Minimum public offer
- about 10% for most mainboard issues vs 25% for SME
- Lot size
- set by each issuer
A mainboard IPO is an offer by a company that is listed, or will list, on the main boards of NSE or BSE. An SME IPO is made by a smaller business that lists on a platform meant for small and medium enterprises.
Both types let you apply through ASBA using the bank account linked to your demat account. The key difference lies in the size, track record and disclosure level of the company behind the issue.
- Mainboard: usually established companies with larger issue sizes
- SME: smaller businesses, often younger or with a shorter track record
- Both: follow SEBI's ICDR rules, but with different thresholds and requirements
Good to know
Being on an SME platform does not mean a company is weak, but it does mean you should look more closely at its numbers before applying.
IPO Lot Size and Minimum Investment Rules for Retail Investors
An IPO lot is the fixed number of shares you must apply for. You can only bid in multiples of one lot, so the lot size decides your entry ticket.
Mainboard IPOs have lot sizes that vary widely from issue to issue. The cost of one lot depends on the price band and the number of shares in the lot.
SME IPOs generally need a higher minimum application value, often around Rs 1 lakh or more. This is why SME issues feel expensive for small investors.
The table below uses illustrative numbers only. They are not from any real IPO.
| Category | Illustrative upper price | Lot size | Amount for 1 lot |
|---|---|---|---|
| Mainboard (example) | Rs 300 | 50 shares | Rs 15,000 |
| SME (example) | Rs 100 | 1,200 shares | Rs 1,20,000 |
Tip
Always calculate the lot cost at the upper end of the price band before applying, since the final price may be higher than the cut-off you expect.
Retail investors usually bid at the cut-off price, so the blocked amount is often based on the upper band. Check the RHP for the exact lot size and bid rules.
IPO Listing and Liquidity Differences: SME vs Mainboard Shares
After listing, mainboard shares generally trade with higher volumes. More buyers and sellers mean it is usually easier to enter and exit a position.
SME shares often trade with thinner volumes. A small number of orders can move the price more sharply, and the gap between buy and sell prices can be wider.
| Feature | Mainboard | SME |
|---|---|---|
| Trading volume | Usually higher | Often thinner |
| Analyst coverage | Generally wider | Generally limited |
| Ease of exit | Usually easier | Can be harder |
| Price swings | Varies by stock | Can be sharper |
SME issues must appoint a market maker for a set period. This supports liquidity in the early days, but it does not guarantee stable prices or easy exits.
Watch out
Do not assume a listing will be smooth. Liquidity can dry up, and you may not be able to sell at the price you expect.
Risk and Disclosure Differences in Mainboard and SME IPOs
Every IPO carries market risk, but the level of disclosure and business information can differ. Mainboard issuers typically face more detailed disclosure and scrutiny because of their larger size.
SME prospectuses may contain less detail and fewer years of audited history. This can make it harder to judge the business, management and future plans.
- Check the business model and how dependent it is on a few customers
- Review the promoter's background and any related-party dealings
- Read the objects of the issue to see how funds will be used
- Look at the audited financial statements for at least the last few years
Watch out
Higher potential reward is never guaranteed. SME IPOs can carry higher risk of price volatility, weak disclosure and business concentration.
No IPO, mainboard or SME, comes with guaranteed listing gains. Treat each issue as a company investment, not a short-term trade.
IPO Allotment and Application Process: Key Differences to Know
When an IPO is oversubscribed, allotment is done through a lottery-style process. Not every applicant gets the full lot they applied for, and some may get nothing.
Mainboard IPOs reserve a retail quota, which is generally 35% of the net offer. Retail investors compete within this category.
SME issues follow their own allotment patterns, and retail applicants may face a larger ticket size before they can participate.
- Check the allotment status on the registrar's website after the allotment date
- Confirm your PAN, demat account and UPI details are correct before applying
- Keep track of the refund and credit dates, which usually follow listing timelines
Tip
Keep your UPI mandate active during the issue period. Blocked funds are released if you are not allotted shares.
Who Should Be Careful Before Applying for an SME IPO
SME IPOs may not suit every investor. Those who should be most careful include first-time IPO investors, people with limited savings and those who may need the money soon.
Investors who are applying mainly for quick listing gains should also think twice. Price moves on listing day can be unpredictable.
- First-time investors who are still learning how IPOs work
- Investors with a small emergency fund or no other diversified investments
- Anyone who may need to sell quickly, since SME liquidity can be limited
- Those who would invest based on hype or rumours instead of the prospectus
If you are comparing an IPO with a mutual fund, note that any mutual fund example refers to Regular plans only. Regular plans include distributor commissions within their expense ratio. You can explore options on mutual funds before making a decision.
IPO Checklist Before Applying: Lot Size, Risk and Rules
Before you apply for any mainboard or SME IPO, go through a simple checklist. This takes only a few minutes and helps you avoid common mistakes.
- Read the RHP for the price band, lot size and minimum application value
- Calculate the blocked amount at the upper price band
- Check the issue size, objects of the issue and promoter holding
- Review the last few years of audited financials and debt levels
- Confirm the listing platform, whether mainboard or SME
- Check the lock-in period for promoters and pre-IPO investors
- Decide your maximum amount based on your overall financial plan
Tip
Keep a note of the issue dates, allotment date and listing date so you are not caught off guard.
Disclaimer
This article is for general educational purposes only and does not constitute investment, legal or tax advice. The numbers used in the examples are illustrative and do not refer to any real company or IPO.
IPO investments carry market risk, and past or expected listing performance does not guarantee future returns. Please read the offer documents carefully and consider consulting a SEBI-registered investment adviser before making any decision.
You can also explore WealthDox for current IPO information, but always verify details from official offer documents.