Details below describe how IPOs commonly work at the time of writing. Each issue has its own prospectus with exact dates, prices and quotas, so always read it.
What is an IPO?
When a company wants to raise money from the public, it offers new shares in the primary market, with approval from the regulator, SEBON. After the offer closes and shares are allotted, the company is listed and its shares start trading on NEPSE in the secondary market, where prices move every day.
What you need to apply
- A Demat account and Meroshare access (see how to buy shares in Nepal).
- A bank account that supports ASBA (Applications Supported by Blocked Amount).
- Enough balance for the number of units you apply for.
How to apply
- Log in to Meroshare and open the Apply for issue section.
- Choose the open issue and press apply.
- Select your bank, enter the number of units (kitta) and confirm with your transaction PIN.
- The amount is blocked in your bank account. It is not paid out yet.
Allotment
If the issue is oversubscribed, units are given out by a lottery, so not everyone who applies gets shares. You check the result in Meroshare or on the issue manager's website. If you are allotted shares, the money is taken from your account and the units appear in your Demat account. If you are not, the blocked amount is released.
After the IPO
When the shares are listed, you can keep them or sell them on NEPSE. Prices can rise or fall from the issue price. A new listing is not a guaranteed gain, so treat it like any other investment decision and read about common beginner mistakes.
Practise the trading part
IPO applications use real money in real accounts, so they cannot be simulated. The trading that follows can. After listing, practise buying and selling in a free practice account with virtual money.
For education only. Not investment advice. Check each issue's prospectus and the rules of SEBON and CDSC.