Applying for an IPO is an online process. To apply for an IPO, you need a Bank Account, Demat Account, Mero Share account, and a Central Registration Number (CRN). Let me explain how to create these accounts.
First of all, open a bank account in any one of the banks. If you already have a bank account, you don't need to open another one. If you don't, go to the bank and create it. Nowadays, many banks also have facilities to create a bank account online. You can check the bank's website to know about it.
A Demat account is the account where you keep your shares purchased. Just like you have a bank to keep your money, you need a Demat account to keep the shares you purchased from an IPO or secondary market.
So, after having a bank account, you can proceed further to create your Demat account. To create it, you should visit the bank again and fill out the Demat Account form. The only document required is a copy of your citizenship. Some banks provide facilities for an online Demat account too. You can check their website.
Mero Share is a website and application designed to help you manage your Demat Account. Similar to using mobile banking to manage your bank account online, Mero Share lets you handle your Demat Account online.
So, after you get your Demat Account Number, you should again fill out the form for Mero Share. This can also be done through visiting the bank or through online means, by visiting the bank's website. Almost all banks provide facilities for an online Mero Share account.
Central Registration Number (CRN)
CRN, or Central Registration Number, is a unique identification number assigned to Investors of Share Market in Nepal. This is required while applying for an IPO from Mero Share.
So, after having a Demat account, you can fill out the form for CRN. You can fill out the CRN form at the same time when you visit the bank to open a Mero Share account. You can also ask the bank for a CRN online. Almost all banks provide you CRN online. Also, you can ask your bank for a CRN through email too.
Keep in mind that some banks accept all account opening forms, Demat account forms, Mero Share, and CRN at the same time. However, some accept the bank account opening form at one time and the remaining forms on the next visit. It depends upon the bank's terms and policies.
Also, some banks provide the facility of a free bank account, free Demat, and Mero Share account. However, some charge a few fees, i.e., Rs. 100 to Rs. 1,000 to open a bank account, Rs. 200-350 for a Demat account, and Rs. 50-100 for a Mero Share account. CRN requests are free for all banks.
Now, after opening a Mero Share account, you will receive Mero Share login ID and password in your email or message. You can then go to https://meroshare.cdsc.com.np website and log in to Mero Share.
Then, in the menu section, you will see "My ASBA." Click on it, and you will see the active issue if the IPO is currently open in the market.
Click on "apply now," mention quantity, mention your CRN number, and apply for shares. You should have a sufficient balance in the bank equal to the IPO price plus service charge that the bank charges you (10-30 Rupees). Some banks provide free service too, look at the bank's terms and conditions.
Once you apply for an IPO, the bank will freeze the amount equal to the IPO price until the allotment of IPO is conducted. If you get allotted, you will receive shares, and the bank will deduct the money from your account equal to the allotted amount. If not, the bank will unfreeze your amount.
You can then sell such shares on the secondary market when they are available for trade in the market.
If you want to know basics of share market visit our blog " Understanding the Basics of Share Market in Nepal : A Beginner's Guide"