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

A depository participant is asked by a client about shares that have been subscribed to in an IPO. If the client applied through the ASBA facility and was allotted shares, how do the shares reach the client?

The shares are credited directly to the demat account quoted in the IPO application. Public issues are allotted in dematerialised form, so the registrar passes allotment details to the depository, which credits the client's account. No physical certificate is issued and the broker does not hold them.

  1. AThe registrar sends physical certificates after the listing
  2. BThe shares are credited to the demat account given in the application, as IPO shares are allotted in dematerialised formCorrect
  3. CThe client must open a new account with the issuer
  4. DThe shares are held by the broker until the client requests delivery

Explanation

IPO shares are issued in dematerialised form. The issuer and registrar provide allotment details to the depository, which credits the shares to the demat account mentioned in the application. Hence the client must hold a valid demat account, and no physical certificate or broker custody applies.

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