In this article, I am going to list 5 Reasons Why Your IPO is Rejected in Nepal.
As of 2021, there are more than 24 lakh IPO applicants who apply for Initial Public Offering in Nepal. The number is increasing day by day. Since there are is a provision of minimum 10 Units of IPO should be alloted to investors, many applicants do not get a share. In this article, we are going to list the 7 reasons why your IPO is rejected in Nepal even before the allotment.
1) When you apply in same IPO from multiple Demat accounts
According to the existing rules, one person can open a maximum of 2 Demat accounts. However, when you apply for one IPO, you have to use only one Demat account. If you have multiple Demat accounts, your information is recorded exactly the same in the data center of Central Depository System and Clearing (CDSC). The system detects your multiple application during the verification process. Multiple application by the same person is strictly prohibited. So, apply only from a single Demat account.
2) Not having enough bank balance
If you do not have enough bank balance equivalent to applied units, then your application will be rejected. So, make sure you have enough bank balance before you apply for IPO.
If you are applying for 10 units and the face value of the IPO is 100, then you have to have at least 1100. It is because banks also deduct the CASBA charge. Different banks have different CASBA charges ranging from Rs. 0 to Rs.100 per application.
3) When you apply multiple times
Another reason for IPO rejection in Nepal is when you apply multiple times. If you apply from the bank as well as from Mero Share, your application will be recorded two times and marked as a duplicate entry. In another case, if you already have an employee or local shares of a particular company then you can not apply for the general public. So, do not apply multiple times to avoid early rejection.
4) Wrong BOID
If you are applying from CASBA banks then you have to fillup the form. In this situation, make sure your BOID. along with other details are correct. According to the capitals, some applications get rejected due to the wrong BOID number (Demat account number) in every IPO. However, if you are applying from “Mero Share“ through online, you don’t have this problem as your Demat number is automatically enters.
Out of the total disqualifications, thousands of applicants are denied because their Demat account numbers failed to be verified. After the Demat account was made mandatory from Magh 1, 2073, having an active Demat account is compulsory to be allotted shares in an issue.
5) Applying for odd lot
Again this issue occurs when you are applying from banks and generally new applicants make this mistake. You have to apply for 10 or multiplication of 10 units in the lot. For example, you can apply for 10, 20, 30, 70, 100 but not 15, 23, 45, etc. According to the report of capitals, some applicants get rejected due to the odd-lot Kitta.
So, 5 Reasons Why Your IPO is Rejected in Nepal are
- When you apply in the same IPO from multiple Demat accounts
- Not having enough bank balance
- When you apply multiple times
- Wrong BOID
- Applying for odd lot
There are multiple steps of the verification process in IPO allotment. Your application first needs to be verified before passing the initial application process. If all of your details and records mentioned above are fulfilled by your application then only your application will be verified. After verifying the application, you are eligible for allotment. However, your chance of getting the share still depends on how many applications vs how many units are issued.
However, if you are not rejected, at least there is a chance for you. In the meantime, take care of these 7 Mistakes To Avoid While Applying For IPO in Nepal.
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