3,741 applicants disqualified from StanChart FPO for providing incorrect demat number; Rs 51.81 crore investment rejected

Standard Chartered Bank Nepal Limited (SCB) had issued 25.58 lakh units FPO shares from Chaitra 1 to Chaitra 4, 2073. Over 2.21 lakh applicants had applied more than Rs 36.21 arba for the issue that was worth Rs 3.30 arba. Applicants who had applied up to 140 shares were decided through lottery and flat 6.38% were allotted to applicants above 140 units. 4,291 applications were disqualified. As per NMB Capital, the issue manager, some applications were disqualified due to wrong BOID number (demat account number), some were rejected due to duplicate applications and some applied odd kitta. Out of the total disqualifications, 3,741 applicants were denied because their demat account numbers failed to be verified. After demat account was made mandatory from Magh 1, 2073, having an active demat account is compulsory to be allotted shares in an issue. Around Rs 40.96 crore worth of investment did not yield return in this FPO because the applicants provided wrong demat account number. Likewise, a total of 80 applicants were rejected because they provided multiple applications. As per an official of NMB Capital, some applicants were found to have applied from both ASBA process and regular applications. “Although the applicants provided different demat numbers, the system matched their father’s name and grandfather’s name. When the system finds two applications with the same three names, it rejects both the applications”, said the official. A large number of multiple applications were also received during the FPO of Nepal Life Insurance and IPO of Forward Community Microfinance.

No. of applications	Applied Share Kitta	Amount (Rs.)	Reason for Disqualification
80	10,130	13,067,700	Multiple Applications
470	73,925	95,363,250	Odd Kitta
3741	317,570	409,665,300	BOID Not Verified
4291	401,625	518,096,250	TOTAL

Similarly, 470 application forms were rejected just because they had applied for odd number of units. As per the existing rule, the number of applied kitta must be a multiple of 10. As such, applying for 150 kitta is valid, but not for 155 or 151 kitta. Over Rs 9.53 crore worth of investment was rejected for applying odd kitta. All these rejections boil down to the increased need of share market literacy for investors and competent training for staffs. Staffs working to verify the application forms should be able to inform the applicants that applying odd kitta is not valid. Likewise, the huge number of applications that were rejected due to not providing correct demat number or multiple applications shows that some investors are also trying to exploit the system. NMB Capital, in this case, has done an impressive work to identify such exploits and reject them. Also See: Standard Chartered FPO Allotment Module Full Invalid Applications List: