Mero Share and IPO: Everything You need to know [Updated]

GP Chudal
Author - personGP Chudal
November 13, 2023
0

What is Mero Share?

Mero share is a term that refers to an online platform that allows investors to manage their holdings of shares electronically in Nepal. Mero share lets you see stock transactions associated with your Demat account, apply for IPOs, view your portfolio, and more. Mero share is created by CDS & Clearing Limited (CDSC) for Nepalese Capital Market investors.

To use mero share, you need to have a Demat account and a CRN (C-ASBA Registration Number) from your bank. You also need to register for mero share by filling a form and paying a fee at your DP (Depository Participant). Once you get your login credentials, you can access mero share from the official website or the mobile app.

Mero share is a useful tool for investors who want to keep track of their share information, apply for IPOs, and monitor the market trends.


Meroshare-and-IPO

How to Open Mero Share Account?

To open a Mero Share account, you need to have a Demat account and a CRN (C-ASBA Registration Number) from your bank. A Demat account is an account that holds shares digitally and eliminates the need for physical certificates and paperwork. A CRN is a unique number that links your bank account and your Demat account. You need these numbers to apply for IPOs, FPOs, and other share issues through Mero Share.

You can open a Demat account at any bank, broker, or capital authorized to provide the service. You will need to fill a form and submit some documents such as your citizenship certificate, bank account details, photos, etc. You will also need to pay a fee for opening and maintaining your Demat account. The fee may vary depending on the service provider.

After opening a Demat account, you can get your CRN from the same bank where you opened your Demat account or from any other bank that offers C-ASBA service.

Once you have your Demat account and your CRN, you can register for Mero Share by filling a form and paying a fee at your DP (Depository Participant). This is the same institution that opened your Demat account. You will get your login credentials for Mero Share after registering. You can access Mero Share from the official website or the mobile app.

How to Use Mero Share?

Mero Share is a useful platform that allows you to apply for IPOs, FPOs, and other share issues, check your share portfolio, transfer shares, and more. Here are some of the features and functions of Mero Share:

1. To apply for IPOs, FPOs, and other share issues, you need to go to the My ASBA tab and then click on Current Issue. You will see a list of available share issues that you can apply for. Select the one you want and enter the number of shares you want to buy. You also need to choose your bank account and enter your CRN number. Then, enter the verification code and submit your application.

2. To check your share portfolio, you need to go to the My Portfolio tab. You will see a summary of your share holdings, such as the total number of shares, the total market value, the total cost, and the total gain or loss. You can also see the details of each share, such as the company name, the quantity, the average cost, the market price, and the gain or loss percentage.

3. To transfer shares, you need to go to the My EDIS tab. EDIS stands for Electronic Delivery Instruction Slip. It is a service that allows you to sell your shares before submitting a POA (Power of Attorney). You need to use EDIS to verify and authorize your share transactions. Under the Transfer Shares section, you can select the share details and click on Proceed. Then, you need to check the quantity, agree to the terms, and confirm to complete EDIS.

What is the process of applying for IPO through Mero share?

The process of applying for IPO through mero share is as follows:
  • First, you need to have a Demat account and a CRN (C-ASBA Registration Number) from your bank. You also need to register for mero share by filling a form and paying a fee at your DP (Depository Participant). Once you get your login credentials, you can access mero share from the official website1 or the mobile app.
  • Next, you need to log in to mero share using your username and password. From the menu on the left, go to My ASBA > Current Issue. You will see a list of IPOs that are open for application. Click Apply next to the IPO you want to apply for.
  • Then, you need to fill up the Applied Share Quantity, which is the number of shares you want to buy. You also need to enter your CRN number accurately, which is a unique number that links your bank account and your Demat account. Click on Apply to submit your application.
  • After that, you will see a confirmation message that shows your application details. You can also check the status of your application from the Application Report section. The amount applied will be blocked in your bank account until the share allotment or result is published.
  • Finally, you can check the IPO result online from the Allotment section. You will see whether you have been allotted any shares or not. If you have been allotted shares, they will be credited to your Demat account. If not, the blocked amount will be released to your bank account.

How to Sell Shares and do EDIS in Mero Share?

To sell your shares, you need to contact a broker or a trading platform that can execute your order. You can find a list of brokers and trading platforms on the website of Nepal Stock Exchange (NEPSE). You need to provide your Demat account number, your share details, and your price and quantity preferences to your broker or trading platform. They will charge you a commission fee for their service.

After you sell your shares, you need to do EDIS in Mero Share to finalize your transaction. EDIS is a service that allows you to verify and authorize your share transfer electronically. You need to do EDIS within the settlement period, which is usually two working days after the trade date. 

To do EDIS in Mero Share, you need to follow these steps:
  1. Log in to your Mero Share account and go to the My Purchase Source tab. This will show you the details of your share purchases, such as the company name, the quantity, the cost, and the WACC (Weighted Average Cost of Capital).
  2. Select the share that you want to do EDIS and click on Proceed. Then, update the WACC calculation purpose declaration and click on Update. This will record your purpose for the share purchase.
  3. Go back to the dashboard and go to the My Holdings tab. This will show you the details of your share holdings, such as the company name, the quantity, the market value, and the CGT (Capital Gains Tax).
  4. Select the share that you want to do EDIS and click on Proceed. Then, select the CGT calculation purpose and click on Update. This will record your purpose for the share transfer.
  5. Go back to the dashboard and go to the My EDIS tab. This will show you the details of your share transfers, such as the company name, the quantity, the settlement date, and the status.
  6. Under the Transfer Shares section, select the share that you want to do EDIS and click on Proceed. Then, check the quantity, agree to the terms, and confirm to complete EDIS.

How to Change Password and Transaction Pin in Mero Share?

To change your password and transaction pin in Mero Share, you need to follow these steps:
  1. Log in to your Mero Share account and go to your profile on the top right corner of the dashboard.
  2. Click on the Change Password tab. Enter your current password and your new password twice. Then, click on Change Password.
  3. Click on the Change Transaction Pin tab. Enter your Mero Share password and your new transaction pin twice. Then, click on Change Transaction Pin.
Your password and transaction pin are important for securing your Mero Share account and your share transactions. You should change them regularly and keep them confidential.

How to renew Mero Share account?

You need to renew your Mero Share account annually or for multiple years at a time. The renewal fee for the Mero Share account is NPR 50 per year. You can renew your Mero Share account online using various payment methods, such as eSewa, Khalti, Connect IPS, IME Pay, and others. 

You can also renew your Mero Share account directly from the Mero Share portal or app using eSewa as the payment partner. To renew your Mero Share account online, you need to follow these steps:
  1. Log in to your Mero Share account and go to your profile on the top right corner of the dashboard. You will see a dialog box if your Mero Share account has expired or is about to expire. Click on Proceed.
  2. Click on the payment partner that you want to use. You will see a list of available payment options, such as eSewa, Khalti, Connect IPS, IME Pay, and others.
  3. Choose the number of years that you want to renew your Mero Share account for and click on Proceed. You will see the amount that you need to pay and the details of your Mero Share account.
  4. Log in to your chosen payment partner and confirm your payment. You will receive a confirmation message and an email from CDSC after your payment is successful.
  5. Log in to your Mero Share account again and check your profile. You will see your updated Mero Share expiry date.

Mistakes to avoid while applying IPO in Nepal through Mero Share

  1. Some of the mistakes to avoid while applying IPO in Nepal through Mero Share are:
  2. Applying from multiple Demat accounts by a single person in a single IPO. This is strictly prohibited and will lead to rejection. You should use only one Demat account for one IPO.
  3. Not having enough bank balance equivalent to the applied units plus the C-ASBA charge. The C-ASBA charge is the fee that the bank deducts from your account when you apply for an IPO. It varies from Rs. 10 to Rs. 100 depending on the bank. If you do not have enough balance, your application will be rejected.
  4. Applying multiple times for the same IPO. If you apply from the bank as well as from Mero Share, your application will be recorded two times and marked as a duplicate entry. In another case, if you already have an employee or local shares of a particular company then you cannot apply for the general public. You should apply only once for an IPO to avoid rejection.
  5. Entering the wrong BOID or CRN number. BOID is your 16-digit Demat account number and CRN is your C-ASBA Registration Number that links your bank account and your Demat account. If you enter the wrong BOID or CRN, your application will be rejected. You should check your BOID and CRN carefully before applying.
  6. Applying for odd lot unit. You have to apply for the multiplication of 10 units in the lot. For example, you can apply for 10, 20, 30, 70, 100 but not 15, 23, 45, etc. If you apply for odd lot unit, your application will be rejected. You should apply for the right lot unit as per the IPO guidelines.
  7. Not recognizing the type of IPO. Many people do not know the difference between ordinary shares, debenture, and mutual fund. All ordinary shares, debenture, and mutual funds are issued through IPO so new investors randomly apply for debenture and mutual funds without knowing them. You should understand the type of IPO and its features before applying.
These are some of the common mistakes that lead to IPO rejection in Nepal. You should avoid these mistakes and follow the instructions given by Mero Share and the issue manager.

What is the minimum amount to apply for an IPO?

The minimum amount to apply for an IPO in Nepal depends on the number of shares you want to buy and the C-ASBA charge of your bank. The C-ASBA charge is the fee that the bank deducts from your account when you apply for an IPO. It varies from Rs. 10 to Rs. 100 depending on the bank.

The number of shares you can apply for an IPO is usually in multiples of 10, which is called a kitta. The face value of each share is Rs. 100, so if you want to apply for 10 kitta, you need to have at least Rs. 1000 in your account. However, you also need to pay the C-ASBA charge, so the minimum amount you need to have is Rs. 1000 plus the C-ASBA charge of your bank.

For example, if your bank charges Rs. 50 for C-ASBA, then you need to have at least Rs. 1050 in your account to apply for 10 kitta of an IPO. If you want to apply for 20 kitta, then you need to have at least Rs. 2100+/- in your account.

However, applying for more shares does not guarantee that you will get more shares in the allotment. The allotment of shares is done by a lottery system, and each applicant is allotted a minimum of 10 kitta if there are enough shares available. If there are more applicants than the number of shares, then some applicants may not get any shares at all.

Therefore, it is advisable to apply for only 10 kitta of an IPO unless the number of shares issued is very large (more than 21 million). This way, you can increase your chances of getting at least 10 kitta and avoid wasting your money on C-ASBA charges.

What is the maximum amount I can apply for an IPO?

The maximum amount you can apply for an IPO in Nepal depends on the number of shares you want to buy, the face value of the shares, and the C-ASBA charge of your bank. The C-ASBA charge is the fee that the bank deducts from your account when you apply for an IPO. It varies from Rs. 10 to Rs. 100 depending on the bank.

The number of shares you can apply for an IPO is usually in multiples of 10, which is called a kitta. The face value of each share is Rs. 100, so if you want to apply for 10 kitta, you need to have at least Rs. 1000 in your account. However, you also need to pay the C-ASBA charge, so the maximum amount you need to have is Rs. 1000 plus the C-ASBA charge of your bank.

For example, if your bank charges Rs. 50 for C-ASBA, then you need to have at least Rs. 1050 in your account to apply for 10 kitta of an IPO. If you want to apply for 20 kitta, then you need to have at least Rs. 2100 in your account.

However, applying for more shares does not guarantee that you will get more shares in the allotment. The allotment of shares is done by a lottery system, and each applicant is allotted a minimum of 10 kitta if there are enough shares available. If there are more applicants than the number of shares, then some applicants may not get any shares at all.

Therefore, it is advisable to apply for only 10 kitta of an IPO unless the number of shares issued is very large (more than 21 million). This way, you can increase your chances of getting at least 10 kitta and avoid wasting your money on C-ASBA charges.

How many times can I apply for a single IPO?

You can apply for a single IPO only once in Nepal. If you try to apply more than once using multiple Demat accounts or bank accounts, your application will be rejected. This is because the IPO allotment process is done by a lottery system, and each applicant is allotted a minimum of 10 kitta (shares) if there are enough shares available. If there are more applicants than the number of shares, then some applicants may not get any shares at all.

Therefore, it is advisable to apply for only 10 kitta of an IPO unless the number of shares issued is very large (more than 21 million). This way, you can increase your chances of getting at least 10 kitta and avoid wasting your money on C-ASBA charges. C-ASBA is the fee that the bank deducts from your account when you apply for an IPO. It varies from Rs. 10 to Rs. 100 depending on the bank.

To apply for an IPO in Nepal, you need to have a Demat account and a CRN (C-ASBA Registration Number) from your bank. You also need to register for mero share by filling a form and paying a fee at your DP (Depository Participant). Once you get your login credentials, you can access mero share from the official website or the mobile app. From there, you can apply for the IPOs that are open for application by entering your Applied Share Quantity and your CRN number.

Can I apply for IPO through Mero Share without a DEMAT account?

No, you cannot apply for IPO through Mero Share without a Demat account. A Demat account is a mandatory requirement for investing in the Nepalese stock market. A Demat account is an account that holds shares digitally and eliminates the need for physical certificates and paperwork. You need to have a Demat account to apply for IPOs, view your share portfolio, transfer shares, and receive dividends.

To open a Demat account, you can go to any bank, broker, or capital authorized to provide the service. You will need to fill a form and submit some documents such as your citizenship certificate, bank account details, photos, etc. You will also need to pay a fee for opening and maintaining your Demat account. The fee may vary depending on the service provider.

After opening a Demat account, you will also need a CRN (C-ASBA Registration Number) from your bank. This is a unique number that links your bank account and your Demat account. You will need this number to apply for IPOs through Mero Share. You can get your CRN from the same bank where you opened your Demat account or from any other bank that offers C-ASBA service.

Once you have your Demat account and your CRN, you can register for Mero Share by filling a form and paying a fee at your DP (Depository Participant). This is the same institution that opened your Demat account. You will get your login credentials for Mero Share after registering. You can access Mero Share from the official website or the mobile app.

Mero Share is a useful platform that allows you to apply for IPOs, check your share portfolio, transfer shares, and more.

What is the difference between ASBA and CASBA?

The difference between ASBA and CASBA is as follows:
  1. ASBA stands for Application Supported by Blocked Amount. It is a system that allows investors to apply for public issues of securities (such as IPOs, FPOs, debentures, etc.) by blocking the application money in their bank account until the allotment of shares.
  2. CASBA stands for Centralized Application Supported by Blocked Amount. It is an advanced form of ASBA that links all the banks and financial institutions that provide ASBA service with the beneficiary owner’s ID (BOID) or demat account number. It enables investors to apply for public issues of securities online through Mero Share service.
  3. The main difference between ASBA and CASBA is that ASBA requires investors to go to their respective banks and fill up a physical form to apply for public issues of securities, whereas CASBA allows investors to apply online from anywhere using their CRN (CASBA Registration Number) and BOID. CASBA also verifies the bank account and demat account details of the investors before accepting their applications.
  4. Another difference between ASBA and CASBA is that ASBA charges vary from bank to bank, whereas CASBA charges are fixed at Rs. 10 per application for all banks and financial institutions.

How do I know if an IPO is worth investing in?

Investing in an IPO can be a rewarding but risky decision. An IPO is the process by which a private company offers its shares to the public for the first time. The price of the shares is determined by various factors, such as the company’s financial performance, growth prospects, competitive landscape, market demand, and the story of the company. To know if an IPO is worth investing in, you need to do some research and analysis on the company and its industry. Here are some steps you can follow to evaluate an IPO:

a. Read the prospectus: The prospectus is a document that contains detailed information about the company, its business model, its financial statements, its risks, its use of proceeds, and its IPO terms. You can find the prospectus on the website of the Securities Board of Nepal (SEBON) or the company’s website. The prospectus can help you understand the company’s strengths, weaknesses, opportunities, and threats, as well as its valuation and pricing.

b. Compare with peers: You can compare the company’s financial ratios, such as earnings per share, price-to-earnings ratio, return on equity, and debt-to-equity ratio, with its peers in the same industry. This can help you assess the company’s profitability, efficiency, and leverage, as well as its relative valuation. You can also look at the industry trends, growth drivers, and challenges, and how the company is positioned to cope with them.

c. Check the demand and supply: You can check the demand and supply of the IPO by looking at the subscription status, which shows how many times the IPO has been oversubscribed or undersubscribed. A high subscription indicates a strong demand for the shares, which may lead to a higher listing price. However, a high subscription also means a lower probability of getting the shares allotted. You can also check the grey market premium, which is the difference between the IPO price and the unofficial price quoted in the grey market. A high grey market premium indicates a positive sentiment for the IPO, but it is not a guarantee of the listing price.

d. Review the management and promoters: You can review the management and promoters of the company by looking at their background, experience, reputation, and shareholding. You can also check if there are any pending litigations, disputes, or regulatory actions against them. You want to invest in a company that has a competent, trustworthy, and committed management and promoters, who have a clear vision and strategy for the company’s growth.

e. Be cautious of the hype: You should be cautious of the hype and speculation that may surround an IPO, especially if it is from a popular or well-known company. Sometimes, the hype may overshadow the actual fundamentals of the business, and lead to unrealistic expectations and inflated valuations. You should not invest in an IPO based on hearsay, rumors, or emotions, but on your own research and analysis.

These are some of the steps you can follow to evaluate an IPO and decide if it is worth investing in. However, you should also be aware of the risks and challenges of investing in IPOs, such as volatility, liquidity, lock-in period, and underperformance. 

You should invest in an IPO only if you are confident about the company’s long-term prospects and growth potential, and if you are comfortable with the price and the risk-reward ratio. 

You should also diversify your portfolio and invest only a small portion of your funds in IPOs, as they are not suitable for all investors.

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