WHAT — do numbers: ek lower floor price aur ek upper cap price.
WHY — company + merchant bankers ko true demand pata nahi hoti, isliye wo market ko band ke andar bid karne dete hain. Final issue price (jise discovered price bhi kehte hain) wahan se set hoti hai jahan demand sabse zyada strong hoti hai.
HOW — SEBI rules require karte hain ki cap, floor ke 20% ke andar ho:
WHY — Lakhon tiny 1-share bids process karna costly hai. SEBI bhi require karta hai ki har retail application cap price pe roughly ₹14,000–₹15,000 ke worth ki ho, isliye lot size us minimum ko hit karne ke liye choose kiya jaata hai.
HOW — lot size is tarah compute hota hai ki (lot size) × (cap price) us minimum-application window mein aa jaaye.
WHY ye retail ki help karta hai — small investors exact price judge nahi kar sakte. Cut-off tick karna guarantee karta hai ki unki bid final price pe valid rahegi (jab tak unhone enough money block ki ho), allotment chances improve hote hain.
HOW money block hoti hai — aap cut-off pe apply karte ho lekin aapke funds cap price pe block hote hain (worst case). Agar final price kam hoti hai, to extra refund/unblock ho jaata hai.
Recall Feynman: ek 12-saal ke bachche ko explain karo
Ek company part-owners banne ke tickets bechna chahti hai, lekin sahi ticket price nahi pata. To wo kehti hai: "Price ₹100 aur ₹105 ke beech kahin hogi — andar bid karo." Yehi price band hai. Tiny messy orders avoid karne ke liye, aapko tickets 140 ke packs mein khareedne padte hain (lot). Sabke bid karne ke baad, ek winning price choose hoti hai — cut-off. Chhote bacche (retail investors) bas bol sakte hain "main winning price pay karunga, jo bhi ho," aur paisa temporarily top price ₹105 pe hold hota hai taaki unke paas pakka enough ho; bacha hua wapas aa jaata hai.
