What do you need to apply for IPO?

What is an IPO?

Initial public offering or IPO refers to the process of taking a privately owned company public. When a company is private, 100% of the company’s shares are owned by the owner(s) or stakeholder(s) of the company. After the owner(s) of the company decide to take the company public, they approach the Nepal Stock Exchange to list their company.

What do you need to apply for IPO?

Demat Account- Demat account is required to invest in IPOs. This is where your share will be stored after the allotment.

Trading Account– It is mandatory to have a trading account before applying online for IPO. You can open a trading account with any SEBON certified Depository Participant, like Naasa Securities, Sweta Securities, Trishakti Securities etc.

Bank Account– A bank account is required to pay for the shares you have applied for. Earlier, the bid amount of shares was debited from the bank account. Later, based on the number of shares allotted, the remaining amount will accumulate; It was time consuming. So, CDS and Clearing formulated CASBA or Application Supported by Blocked Amounts to simplify the payment procedure. Via CASBA, a certain amount of money is blocked depending on the number of shares you applied for. After the allotment, cash is debited from your bank, and if you get fewer shares than you applied for, then the rest of the amount is unblocked.