When an IPO is oversubscribed, meaning there are more applications than available shares. In this situation, registrar in consultation with the Lead Manager conducts a computerised lottery to fairly distribute the shares among the applicants. Each retail individual investor (RII) gets allocated at least one lot; provided there are those many shares reserved for RII in the IPO and the number of RII applicants. IPO shares are allocated in a bunch known as lot. A lot includes x number of shares worth around Rs 15,000 in Mainboard IPO and Rs 1,00,000 in SME IPO. The number of shares in lot (lot size) is declared by the issuer company along with the issue price.   The number of maximum retail investors who could get allotment in an IPO is derived by dividing the total number of shares offered in RII reserved category by the lot size.  This ensures transparency and equal opportunities for everyone involved in the IPO application process.