Distribution of dividend or interest payments, issue of rights or bonus securities, consolidation of holdings or issue of another security on account of merger or demerger, calling money on partly paid securities, buyback or open offer, etc. are normally the purposes for which issuer sets up corporate action to consider benefits or entitlements of holder.

When a company issues securities to the public through a prospectus it is popularly known as an IPO. Credit of securities allotted in IPOs can be directly effected in the investors demat accounts.

Yes, it is possible to get securities allotted in IPOs directly in demat form. In fact, in the public issue application form itself, the investor has to mention the BO ID and name and ID of the DP. Any allotment made will be credited into the BO's account directly and the BO will get intimation to that effect from the company.

In case the IPO form provides for 16 digits, the 16 digit BO ID should be entered by the BO. However, if the form provides for separate fields for DP ID & BO ID, the first 8 digits are to be entered as the DP ID and the last 8 digits BO ID. E.g.

No, the application will not be rejected. But the company may allot the shares in physical form, which the BO may subsequently dematerialize. If the application is through the book building route, the application may be rejected.

BOs can verify the credit of the securities allotted to them in the following ways:

Yes, there is a choice of receiving the non-cash corporate benefits either in electronic or in physical mode. Issuers send intimation directly to BOs for ascertaining their choice in this regard.

It is desirable that in case of any discrepancy in cash and non-cash corporate benefits, BO should contact the Issuer / Registrar directly.

All queries regarding the IPO should be addressed to the company or the Registrar & Transfer Agent, whose details are available in the application form/offer document.

If the holdings are in dematerialised form, will the bonuses / rights against them be issued in the same form?

If holding is in physical form, the BO can choose to receive the rights/ bonus allotment in the dematerialised form if he informs his intent to receive the rights/bonus in dematerialised form to the Issuer/RTA.

Normally, the credits due, on account of a rights/bonus allotment are given in the same demat account.

As in the physical segment, the Issuer / Registrar mails the rights form directly to BOs. CDSL / DP would not be mailing the same.

No, in such a case the rights/bonus allotment would have to be issued in physical form.

The basis of allotment of securities is independent of the form (physical / dematerialised) in which the allotted security is requested. Thus, there is no preference given in the allotment to investors applying for securities in dematerialised form. These investors are treated on par with the requests for allotment in physical form.

Securities in such cases are credited to the demat account on the effective day indicated by the Issuer/ RTA, as against time of 15 - 20 days taken in for receiving securities in physical form, because in such cases certificates have to be printed and dispatched.