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NISM Certifications · NISM-Series-VI: Depository Operations · Special Services - Public Offering / Corporate Actions

A company makes an IPO in which shares are allotted only in dematerialised form. After the basis of allotment is finalised, how do successful applicants receive their allotted shares?

Shares are credited electronically to the applicant's demat account. After the basis of allotment is finalised, the issuer or its registrar passes the corporate action details to the depository, which credits the allotted shares to the account stated in the application, with no certificate involved.

  1. AThe registrar sends share certificates by post
  2. BThe issuer gives corporate action instructions to the depository, and shares are credited to the applicants' demat accounts as per the details given in the applicationCorrect
  3. CThe applicant must submit a dematerialisation request after receiving a certificate
  4. DThe stock exchange credits shares directly to the investor's bank account

Explanation

In a public issue, allotment is in demat form. The issuer or its registrar uploads the allotment details to the depositories, which credit the shares to the beneficiary owner accounts mentioned in the application. No certificate or demat request is needed, and banks do not hold shares.

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