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How to apply for IPO from MeroShare in 2024?

Investing in initial public offerings (IPOs) has become more and more popular in Nepal since it offers a fantastic opportunity to buy shares at face value before they are listed on the secondary market. Anyone interested in applying for an initial public offering (IPO) in Nepal may find all the necessary information in this concise guide.

What is an IPO?

An initial public offering, or IPO, is when a business exposes its shares to the general public for the first time. It enables investors to acquire a stake in the business and share in its future expansion and earnings. The Securities Board of Nepal (SEBON) oversees the IPO procedure in Nepal, which is carried out via the Nepal Stock Exchange (NEPSE).

Advantages of investing in an IPO

Investing in an IPO can be highly profitable. Here are some reasons why IPOs attract many investors:

- Affordable Entry: IPO shares are usually offered at a lower price, making it accessible to many investors.

- Potential for Growth: If the company performs well, the stock’s value can increase significantly, offering a good return on investment.

- Ownership and Voting Rights: IPOs allow investors to own a portion of the company and participate in its decision-making process through voting rights.

Requirements for applying in an IPO:

Before applying for an IPO in Nepal, there are a few things you’ll need to have ready:

- Demat Account: A Demat account is essential for holding and transferring shares electronically. You can open a Demat account through any licensed Depository Participant (DP) in Nepal, such as banks or financial institutions.

- MeroShare Account: MeroShare is an online platform provided by CDS and Clearing Limited (CDSC) that allows investors to apply for IPOs, check their portfolio, and track transaction history. You can open a MeroShare account through your DP.

- Bank Account with C-ASBA Facility: C-ASBA (Centralized Application Supported by Blocked Amount) allows investors to apply for IPOs through their bank accounts. Ensure that your bank provides C-ASBA services, as this feature is essential for IPO applications.

Step-by-Step Guide to Applying for an IPO in Nepal

Step 1: Log in to MeroShare

Log in to your MeroShare account. You’ll need to use the credentials provided by your DP when you opened the account.

Step 2: Navigate to “My ASBA”

Once you’re logged in, go to the “My ASBA” section in MeroShare.

Step 3: Select the IPO You Want to Apply For

In the “My ASBA” section, you’ll see a list of available IPOs. Select the IPO you wish to apply for by clicking on it.

Step 4: Fill Out the Application Form

Fill in the required details, such as the number of shares you want to apply for. Note that there’s usually a minimum and maximum share limit per investor, so make sure you’re within the permitted range.

Step 5: Submit Your Application

Once you’ve filled in the necessary details, you might be prompted to enter CRN number as well as PIN number in order to submit the application. Make sure you have those information before you begin your application process. After providing these information, , submit your application.

In most cases, CRN number is the account number of your bank account through which you are applying for IPO.

Your bank will block the corresponding amount in your account. If you’re allocated shares, the blocked amount will be deducted; if not, it will be unblocked.

Step 6: Check Application Status

After submitting your application, you can check its status in MeroShare. You can know the date and time of allotment of IPO from various media sources. Once the allotment is completed, you’ll be able to check your IPO result from CDSC website.

FAQ's about IPO

What is an IPO, and why should I invest in one?

Answer: An Initial Public Offering (IPO) is when a company offers shares to the public for the first time to raise capital. Investing in IPOs allows you to become a shareholder at the initial price, which can provide good returns if the company grows.

How can I apply for an IPO in Nepal?

Answer: You can apply for an IPO in Nepal through the MeroShare platform provided by CDSC (Central Depository System and Clearing Limited) or by visiting your bank to use the C-ASBA (Centralized Application Supported by Blocked Amount) system.

What documents do I need to apply for an IPO?

Answer: You need a Demat account, a bank account linked with ASBA service, and access to MeroShare. Your bank account and MeroShare account should be verified and linked with your Demat account.

What is MeroShare, and how does it work?

Answer: MeroShare is an online platform that allows investors to apply for IPOs, view their portfolio, and monitor transactions. Through MeroShare, you can directly apply for shares, view application status, and check allotment results.

What is the minimum investment required to apply for an IPO in Nepal?

Answer: The minimum investment required for most IPOs in Nepal is typically 10 units (or shares) of the company's stock, which varies depending on the face value of each share. Some companies may set different minimums.

How are IPO shares allotted in Nepal?

Answer: IPO shares are allotted on a lottery basis if the issue is oversubscribed. The system is designed to ensure fair distribution, where eligible applicants may receive a minimum number of shares through a random selection process.

How long does it take to get IPO results after applying?

Answer: IPO results are usually announced within 25 days after the application period ends. You can check the results on MeroShare or the issuing company’s official website.

What is the role of C-ASBA in the IPO application process?

Answer: C-ASBA is a system that blocks the application amount in your bank account until the IPO allotment is completed. If you receive shares, the amount is deducted; if not, the amount is unblocked.

Are there any charges for applying for an IPO in Nepal?

Answer: Yes, banks and financial institutions may charge a small service fee for the ASBA facility, and there may be an additional charge for using MeroShare. Check with your bank for specific fees.

What happens if I don’t get any shares in the IPO allotment?

Answer: If you do not receive any shares, the amount that was blocked in your bank account is unblocked, and no funds are deducted. You can then use the funds to apply for other IPOs or investments.

Conclusion

The procedure of applying for an initial public offering (IPO) in Nepal is simple, particularly when using platforms like as MeroShare and C-ASBA. You can easily engage in the stock market and possibly make good returns if you prepare properly. But before applying, don't forget to do your homework on the business and weigh the dangers.

Best of luck with your IPO applications and happy investing!