Why did lot sizes for index F&O change?

The exchanges revise lot sizes of Futures & Options (F&O) contracts primarily to keep the contract value within a standard range, to keep the contracts affordable and standardised. Since derivatives are leveraged instruments, you do not have to pay the full value of the contract upfront, but the lot size determines your exposure and the margin required. The exchanges undertake lot size revisions to ensure market efficiency and liquidity, and to make contracts more acceptable for a broader set of market participants.