Johnson® SME IPO sets two-lot minimum above ₹2 lakh for individuals

Johnson® requires individual investors to apply for at least two lots with a total application value above ₹2 lakh. The issue structure reserves not less than 9,33,000 equity shares for individual investors, assuming full subscription, but the final number of shares in each lot remains undisclosed until the issue price is finalised.

Why does Johnson® require a two-lot application above ₹2 lakh?

Johnson® sets a minimum application of two lots and above ₹2 lakh for its individual-investor category. The issue document identifies eligible applicants in this category as resident Indian individuals, Hindu Undivided Families applying through the karta, and eligible non-resident Indians. A one-lot application does not meet the stated minimum, irrespective of the eventual number of shares set for one lot.

Johnson® links this minimum to the Securities and Exchange Board of India, or SEBI, Issue of Capital and Disclosure Requirements, or ICDR, Amendment Regulations, 2025. The offer document cites SEBI notification SEBI/LAD-NRO/GN/2025/233 dated March 3, 2025, which provides that the minimum application size must be two lots and above ₹2 lakh. The lot size is shown as blank because it may be adjusted after the issue price and basis of allotment are finalised.

The wording matters because the document uses “individual investors” rather than a separate retail category. The individual minimum requires both conditions to be met: an application for two lots and a value above ₹2 lakh. Johnson® states a different entry condition for non-institutional investors, whose bids must exceed ₹2 lakh and be for more than two lots.

How is the Johnson® issue allocated among investor categories?

Johnson® proposes to issue up to 28,00,800 equity shares with a face value of ₹10 each through the book-building process. The issue is being made under Regulation 229(2) of Chapter IX of the SEBI ICDR Regulations, 2018, which the document says applies where post-issue paid-up capital exceeds ₹10 crore and is up to ₹25 crore.

The issue includes a market-maker reservation of up to 1,41,600 shares, equivalent to 5.06% of the total issue. The net issue, which excludes that reserved portion, is allocated among qualified institutional buyers, non-institutional investors and individual investors. Johnson® says the entire issue would represent 26.50% of post-issue paid-up equity share capital, while the net issue would represent 25.16%.

Johnson® states that the 9,33,000-share individual allocation assumes full subscription. Qualified institutional buyers, or QIBs, may receive up to 50% of the net issue, and up to 60% of the QIB portion may be allocated to anchor investors on a discretionary basis. Within the anchor portion, 33.33% is reserved for domestic mutual funds and 6.67% for life insurance companies and pension funds, subject to valid bids.

Does Johnson® disclose one clear individual-investor allocation percentage?

Johnson® does not present a single consistent percentage for allocation to individual investors across the supplied pages. The issue-structure table and the accompanying note state that not less than 35% of the net issue is available to individual investors applying for the minimum application size. That 35% figure is the basis for the disclosed minimum allocation of 9,33,000 shares.

Johnson® separately states on page 431 that the March 3, 2025 SEBI notification prescribes an allocation of not less than 50% of the net issue to individual investors applying for the minimum application size. The supplied material does not explain why the 35% and 50% statements differ, nor does it say which allocation percentage will govern the final allotment.

The difference is relevant because both descriptions concern individual investors applying at the new two-lot minimum. Johnson® also says that allotment to each individual investor will not be less than the minimum bid lot, subject to the availability of shares in the individual-investor portion. Remaining available shares, if any, may be allotted proportionately, so an eligible application does not itself assure allotment.

How will Johnson® block and process application money?

Johnson® requires individual applications to use Applications Supported by Blocked Amount, or ASBA, including the Unified Payments Interface, or UPI, mechanism. Under ASBA, the full bid amount is blocked in the bidder’s bank account at application rather than paid immediately. The document says SEBI requires stock exchanges to accept ASBA applications only after confirmation that the application money has been blocked.

Johnson® cites SEBI’s April 5, 2022 circular requiring individual investors with applications of up to ₹5 lakh in IPOs opening on or after May 1, 2022 to use UPI. The stated individual-investor minimum above ₹2 lakh is within that ₹5 lakh UPI threshold, although a bidder’s final application value will depend on the final price and lot size.

Johnson® says that if unblocking is delayed by more than two working days after the issue closing date, the responsible intermediary must compensate the bidder at ₹100 per day for the period beyond those two working days. SEBI’s June 21, 2023 circular, as cited in the document, reduced the period for refund of application money from 15 days to four days. Successful allotments will be made only in dematerialised form, meaning electronic holding through a depository account.

What trading framework will apply after Johnson® lists?

Johnson® proposes to list on the SME Platform of BSE Limited, with compulsory market making for at least three years from listing or for another period prescribed by the exchange. A market maker is a registered intermediary required under the stated arrangement to provide trading support in the SME segment. Johnson® applied for in-principle approval through BSE letter LO\SME-IPO\MM\IP\373\2026-27 dated October 13, 2026.

Johnson® says trading will occur in the minimum contract size specified for the SME Platform of BSE Limited. Where a shareholder’s entire holding is worth less than that minimum contract size, the market maker must buy the shareholder’s entire holding in one lot. The document does not state the eventual trading-lot size because the share lot remains subject to finalisation.

Johnson® cautions that it cannot assure active or sustained trading after listing, or the price at which its shares may trade. If listing or trading permission is not obtained, Johnson® says it must refund or unblock the application money within four working days after receiving the exchange’s rejection intimation. A change in the applicable regulatory framework could also affect the listing and trading schedule.

Conclusion

Johnson® combines a compulsory two-lot application with a value above ₹2 lakh for individual investors, making the entry requirement dependent on both the final lot size and the issue price. The allocation structure sets aside at least 9,33,000 shares for individual investors under the issue table’s full-subscription assumption, while ASBA and UPI govern how the bid amount is blocked.

The next point to watch is clarification of the document’s differing 35% and 50% individual-investor allocation statements, both linked to the March 3, 2025 SEBI amendment. Johnson® must also finalise the issue price and lot size, which will establish the exact number of shares and rupee amount required for the mandatory two-lot application.