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

Meera applied in an IPO through ASBA using her bank account and demat details. Allotment of 60 shares was made, but her demat account was found 'closed' at the time of credit. What is the usual consequence?

The credit would fail because the demat account stated in the application is closed, and the matter must be resolved with the registrar and issuer. IPO shares are allotted only in demat form to the declared account, so applicants should ensure it is active and details are correct.

  1. AThe credit fails and the issuer/registrar must resolve it through the demat details, so she should keep the demat account active and correct before applyingCorrect
  2. BThe shares are issued in physical form automatically
  3. CThe depository credits the shares to any other account of Meera
  4. DThe shares are held by the exchange until the account is reopened for up to 5 years

Explanation

IPO shares are allotted only in demat form to the account given in the application. If that account is closed or details are wrong, the credit is rejected and it must be sorted out with the registrar, causing delay. The depository does not redirect to another account and physical issue is not available.

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