Depository System — Secretarial Practice STD 12 Commerce / Arts — Question

IPO is the first sale of shares by a privately owned company to the general public. A public company can raise capital by making an appeal to the general public to purchase shares of the company by issuing a prospectus.

The process of IPO is as follows:

• Submission of Application: The investor (applicant/BO) has to submit an application for securities to the issuer company.
• Verification with Depository: The details of the investor are verified by the company with Depository.
• Report by Depository: After verification depository submits the investors report to the issuer company
• Details of Allotment: The issuer company submits the details of allotment to the depository for updating their records.
• Crediting the account: The depository credits the account of the beneficial owner with a specific number of securities.
• Intimation to the DP: Depository then informs the Depository Participant (DP) about the details of the beneficial owner account.
• Intimation to the BO: Depository Participant informs the beneficial owner (investor) about his investment through Statement of Accounts.