If you are Nepali citizen and working abroad, you may have golden chance to make money. Because you are eligible to apply for the 10% reserved IPO allocated by Nepal Stock Exchange. You can make a lot of money from it, but you should have knowledge. If you don’t know about it or how to apply IPO from abroad, read this article.
What is 10% Reserve Quota in IPO?
SEBON ( Security Board of Nepal) has started allocating 10% quota in IPO for Nepali migrant workers who are working outside of Nepal. The reason behind it was to encourage the worker to open the remittance account and deposit money on it. So that it will increase the remittance for Nepal.
Only those migrant workers are eligible to apply for 10% IPO quota who have work permit from Nepal government and already send Rs 50,000 remittance to the account in last 6 months.
First 10% IPO Quota for Nepali Migrant Workers
Nepal Government has passed the regulation and started 10% reserve quota on every IPO to Nepali migrant workers who are employed abroad.
For the first time, Kalinchowk Darshan Limited has allocated 10% of the IPO (1,08,000 kitta ) to Nepali workers who are employed abroad. After that, SuperMai Hydropower Limited also issued 50,000 shares from Mangsir 21.
Now onward in every IPO, there will be 10% allocation to the Nepali workers abroad. This means they can apply from outside of Nepal and make enough money from IPO.
IPO Allocation to Nepali Migrant Workers
While ordinary investors in Nepal have to rely on luck to get 10 kitta IPO, but the same time Nepali workers in abroad can easily get IPOs because of low number of applicant.
Since there are few investors in abroad, the possibility of allotment in first few IPOs are huge numbers. They may be so lucky to get hundreds of IPO shares for some time. They can earn hundred of thousands rupees through those IPO.
Also Read: Upcoming IPO in 2023 | check the full list
For example, even if 1000 people applied for Kalinchowk Darshan IPO, 108 shares will be awarded for each investors. This means an income of more than Rs 1 lakh is guaranteed. Even they can make much more from it.
Like the investor of Nepal, the workers from abroad is less likely to remain empty-handed. For some time at least every IPO is sure to get 10 shares.
Many of those who understand the stock market were trading shares from abroad even before this, but 10% IPO quota rule is different from before.
Not all Nepali workers can invest in IPO even if they are abroad. For that, certain criteria must be met. Many people may be confused because they do not know the application process. According to the Securities Board, the criteria to be met are as follows.
Requirements to Apply 10% IPO Quota
- To apply for 10% reserved IPO quota worker must have a work permit from the Nepal government when going for foreign employment.
- A remittance account should be opened in the name of the applicant.
- Applicant should have a remittance CRN number.
- The worker must have remitted at least 50,000 rupees in the account in 6 months from the country where he is employed.
- Apart from that, a DEMAT account and Mero shares are compulsory.
Nepali workers who fulfill all these criteria can invest in the IPO of the reserved quota.
No remittance Account? What to do?
Workers who are employed abroad but do not have a remittance account? no worries they can apply online for a remittance account and CRN number from abroad. Almost all banks have provided online facility for this. An account can be opened easily by going to the respective bank’s website and clicking on online account registration.
While opening a remittance account through online, passport with work permit and visa stamp is also mandatory. The government has made reservations in IPO for those who send remittances from official sources and encourage them to send more remittance in Nepal.
Can I apply for IPO from Europe, America and Australia?
The reserved quota IPO has certain criteria, which must be fulfilled. The reserved IPO is only for Nepali nationals who have work permit from Nepal government and working in abroad and sending remittance.
Nepali migrant workers often go to Gulf countries and south Korea through work permit. They can apply for IPO of reserved quota after completing the process.
But if you are in Europe, America and Australia with a work permit, then you can apply for it, otherwise you are not eligible to apply for 10% quota IPO from abroad. Because most of those who go to Europe, America and Australia do not have a work permit. Application for this IPO cannot be made without work permit provided by Nepal government.
But normal IPO which are opened for all nepali citizen and not a 10% quota can be applied from Europe, America and Australia. It does not have any requirements, you are eligible to apply from Europe, America and Australia without work permit.
How to Become Eligible? Here’s the process
- First of all you have to apply for remittance account.( Those who have a savings account before should convert it into a remittance account. )
- Apply for DEMAT account after activation of remittance account. ( If already have DEMAT then link with remittance account.)
- After that apply for CRN number of remittance account.
- Now apply for Mero Share account. ( Those who already have Mero Share can update their remittance account and CRN.)
After receiving Mero Share Login Username and Password, you can apply for the reserved 10% quota IPO online from abroad.
What is CRN Number?
CRN stands for CASBA Number, which is a combination of 8 digits long codes. Bank provides CRN Number after activation of demat account. Every demat account has to use CRN number for IPO application.
You can go to the bank where is your account and apply for the CRN number. The CRN number links the bank account and the DEMAT account, due to which the money in the bank account is blocked at the time of IPO application.