Oversubscription is the normal case
Nepali IPOs for the general public are routinely subscribed many times over. When applications far exceed the units on offer, not everyone can get what they asked for, so allotment becomes a lottery for the minimum lot.
How the lottery works
In a heavily oversubscribed issue, the minimum lot is allotted to as many randomly selected applicants as the issue size allows, and everyone else is not allotted. That is why the number of BOIDs applying matters more than the kitta any one BOID asks for.
In an undersubscribed issue, valid applications are allotted in full.
The timeline
- The issue opens and applications are accepted through MeroShare.
- The issue closes. Applied amounts stay blocked in bank accounts.
- Allotment is done and the result is published on CDSC's result site.
- Banks release the blocked amount for applications that were not allotted.
- Allotted shares are credited to demat accounts.
- The shares are listed on NEPSE and become tradable.
Reading the numbers on an issue
Each issue in the SajiloShare IPO calendar shows the units on offer next to the applicants and units applied reported by CDSC. Units applied divided by units on offer gives the subscription multiple, the best guide to how long the odds are.
Do all of this in one app
SajiloShare stores each MeroShare account once, applies for all of them in one run, checks every result together and shows your portfolio after charges and tax. Free on Android and iPhone.