Initial Public Offer (IPO) is the process of offering new shares of a Company to the general public to raise capital. The Company offering IPO will decide the lot size and the investors can apply (bid) for the shares only in those lots or their multiples.
When the number of bids is more than the number of lots, the shares are said to be over-subscribed, and the allotment is done on lottery basis, which is the scenario most of the time.
Also, when an individual bids to more number of shares, he might have to bid under the High Net-worth Individual (HNI) category.
While in today’s scenario application must be made as per name stated in Demat Account, applying for physical shares was different but exciting! In order to increase the probability of getting selected in a lottery and at the same time to avoid getting categorized as an HNI, investors used to bid for shares by using their names in various combinations.
For example- If the name of an investor is Ramnaresh A, he uses various combinations of his name to make different bids like-
Ram Naresh A
A Ram Naresh
Arcot Ram Naresh
Ram Naresh Arcot.
While name differences like the above didn’t matter until a few years ago, the shareholder will end up facing the following hardships henceforth –
Inability to deposit dividend warrant in bank account due to difference in name leading to monetary loss.
Inability to dematerialize the same since Demat Account is always opened as per name is PAN Card and hence the securities cannot be traded.
Situation sounding too familiar?
Having share Certificates with different name combinations and not knowing what to do with them?
Call Goldenegg and we will get the issue sorted in the least possible time frame.