IPO Frequently Asked Question(s) provide answers to commonly asked questions about IPO's in Indian Stock Market. This IPO FAQ Category helps IPO investors for their better understanding of IPO's and to resolve their quires.
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1. Is it mandatory to have a demat account to apply in an IPO?
Yes it's mandatory to have a demat account to apply in an IPO. IPO Allocated shares are transfer to investors demat account. If you don't provide correct demat account information your IPO bidding application will not consider for share allotment.
Always double check that you provided correct DP ID and Client ID details in the bid/application forms before submitting the form.
2. How do I transfer from one demat account to another demat account?
Transfer of securities from one account to another account can be affected through off-market transactions (i.e. without routing through the broker or stock exchanges) by furnishing the depository participants identity number and the client identity no. The duly filled in slip is to be submitted to the concerned DP with whom you have the demat account. The transfer is affected by NSDL after receiving the executed document forwarded by the DP on behalf of the Client. Charges are applicable and the transferor will have to disclose the market value of the shares intended to be transferred in a separate form which is to be annexed along with the off-market transfer slip.
3. I do not have a demat account. Can I apply in an IPO?
No, an investor can not apply in IPO without demat account. All the public issues of size in excess of Rs.10 crore has compulsorily in demat mode. So if you want to apply for an issue that is being made in a compulsory demat mode, you are required to have a demat account and also have the responsibility to put the correct DP ID and Client ID details in the bid/application forms.
5. What are the maintenance changes for a demat account? Are there any hidden charges or processing fees on the transactions I do on demat account?
Maintenance charges are also known as folio maintenance charges, and is generally levied in advance.
The transaction fee is charged for crediting/debiting securities to and from the account on a monthly basis. While some DPs, such as SBI, charge a flat fee per transaction, Some DPs charge only for debiting the securities while others charge for both.
7. Can a person have more than one demat account on his name?
Yes, a person have more than one demat account on his name. There is no restriction on number of demat accounts which an investor can open. An investor can open more than one account in the same name with the same DP and also with different DPs. For all the accounts, investor has to strictly comply with KYC norms including Proof of Identity, Proof of Address requirements as stipulated by SEBI and also provide PAN number. The investor has to show the original PAN card at the time of opening of demat account.
Yes Demat account can be opened in the name of a minor. The account will be operated by a guardian till the minor becomes major, Guardian has to be the father or in his absence mother. In absence of both, father or mother, the guardian can be appointed by court.