IPO Allotment Status in Nepal: Everything You Need to Know
Investing in the stock market is becoming increasingly popular in Nepal, and Initial Public Offerings (IPOs) are a hot topic among investors. Every time a new IPO is issued, thousands of people apply, hoping to get allotted shares. However, many are left wondering: "Did I get allotted or not?" This is where IPO allotment status comes into play.
In this article, we will break down what IPO allotment is, how the process works in Nepal, how you can check your IPO allotment status, and what to do after the allotment. Whether you're a beginner or an experienced investor, this guide will provide you with everything you need to know about IPO allotment in Nepal.
What is IPO Allotment?
When a company decides to raise capital by issuing shares to the public, it offers an Initial Public Offering (IPO). Investors apply for these shares through their Demat account. However, the number of shares available is often much lower than the number of applications received.
Since demand is high, IPO shares are allotted through a lucky draw system, ensuring fairness in distribution. The IPO allotment status tells you whether you have received shares or not.
How Does IPO Allotment Work in Nepal?
In Nepal, the IPO allotment process follows strict rules set by the Securities Board of Nepal (SEBON) and is managed through CDSC’s Mero Share system. Here’s a step-by-step look at how IPO allotment works:
1. IPO Issuance and Subscription Period
- A company announces its IPO with details such as total shares available, price per share, and the application period.
- Investors apply for the IPO through Mero Share or their bank’s ASBA (Application Supported by Blocked Amount) service.
- The application period typically lasts 4-5 days.
2. Oversubscription and Lottery System
- Most IPOs in Nepal are heavily oversubscribed. For example, if a company issues 1 million shares and receives 1.5 million applications, a lottery system is used to decide who gets allotted.
- The standard allotment rule states that each eligible applicant receives a minimum of 10 shares (if available).
3. IPO Allotment Process
- The company, along with its issue manager (merchant banker), conducts the allotment process using a computerized lottery system.
- Investors who win the lottery receive a minimum of 10 shares.
- If an IPO is highly oversubscribed, many applicants might not get any shares.
4. Publication of IPO Allotment Results
- Once the allotment is completed, the results are published online.
- Investors can check their IPO allotment status through various platforms (explained below).
How to Check IPO Allotment Status in Nepal?
Once the IPO allotment is complete, you can check your status through different platforms. Here’s how:
1. Through CDSC’s Mero Share Portal
Mero Share is the official platform for IPO applications in Nepal. Follow these steps to check your IPO allotment status:
- Go to https://meroshare.cdsc.com.np
- Login using your BOID number and password.
- Click on "My ASBA" → "Application Report".
- Click on the IPO you applied for and check the "Allotment Status".
If allotted, you will see the number of shares you received. If not, it will indicate "Not Allotted".
2. Through the Issue Manager’s Website
Each IPO has an issue manager (e.g., NMB Capital, Siddhartha Capital, Global IME Capital). They also publish allotment results. Visit their official websites and check the IPO allotment section.
3. Through the Company’s Website or NEPSE
Some companies also publish allotment results on their official website or through the Nepal Stock Exchange (NEPSE).
4. Through Banks and Broker Offices
Many banks and stockbrokers provide IPO allotment status. You can visit their offices and ask for your allotment details.
What to Do After Checking Your IPO Allotment Status?
Once you have checked your IPO allotment status, you have two possible scenarios:
1. If You Got Allotted Shares
- The allotted shares will be credited to your Demat account within a few days.
- You can sell them once they are listed on NEPSE or hold them for long-term investment.
- If you wish to sell, place a sell order through your broker’s TMS (Trade Management System).
2. If You Didn’t Get Allotted
- The blocked amount will be refunded to your bank account within a few days.
- You can use the refunded amount to apply for upcoming IPOs.
- Keep track of new IPO announcements through SEBON, Mero Share, or financial news portals.
Why is IPO Allotment in Nepal So Competitive?
The demand for IPOs in Nepal is significantly higher than the supply. Here’s why:
- High Returns: IPOs often give quick profits after listing on NEPSE.
- Low Investment Risk: Since IPO shares are issued at a lower price, the risk is minimal.
- Growing Stock Market Awareness: More Nepalese are investing in stocks due to increasing financial literacy.
For example, in 2023, Sarbottam Cement’s IPO received over 1.5 million applications, while only 250,000 investors got shares. This shows how competitive IPO allotment has become.
Tips to Increase Your Chances of Getting an IPO Allotment
While IPO allotments are based on a lottery, here are some strategies that might improve your chances:
- Apply for the Minimum 10 Shares: Since IPOs are heavily oversubscribed, applying for only 10 shares (the minimum) is the best strategy.
- Use Multiple BOID Accounts: Family members can apply separately using their own Demat accounts.
- Stay Updated on IPO Announcements: Follow SEBON, NEPSE, and merchant banks for upcoming IPOs.
- Ensure Correct Details in Your Application: Any errors in your Demat number, bank account, or personal details may lead to rejection.
Final Thoughts
IPO allotment in Nepal is a lottery-based system, making it challenging to secure shares due to high demand. However, by understanding how the process works, where to check allotment status, and what to do next, investors can make informed decisions.
If you didn’t get allotted, don’t be discouraged! There are new IPOs launching frequently, so keep applying and stay patient. The Nepali stock market is growing, and getting into IPOs early can be a great way to build wealth over time.
Do you have any IPO-related questions? Drop them in the comments, and I’ll be happy to help!