The Hindu Business Line : DPs have their hands full with Reliance Power IPO

At National Securities Depository Ltd (NSDL), the number of active accounts has increased by 2.22 lakh in just 15 days, from 67.50 lakh as on December 31 to 69.72 lakh as on January 15. This constitutes a 3.28 per cent increase in just half a month. The average monthly increase in demat accounts over the last four months at NSDL is 3.5 per cent.

At Central Depository services Ltd (CDSL), the number of active accounts has increased by 4.44 lakh over a fortnight. It rose by a dramatic 13.10 per cent for the period December 31, 2007 to January 15, 2008 (compared with 4.34 per cent for the period December 15 to December 31).

The rush for new demat registrations was evident everywhere.

When a Business Line correspondent visited some local banks it appeared that the only job being done there was processing of IPO applications. Brokers said even elderly people were interested and added that women as old as 80 have invested in the IPO.

“The demat department people in our office have not gone home for the past six days as we are overloaded with demat applications and are working beyond our capacity,” said Mr Sanjay Someshwar, a broker.

BLOG ADVICE

The frenzy among retail investors for the Reliance Power IPO is such that Internet blogs are dishing out advice on how to overcome every conceivable problem.

One “agony uncle” has special advice for people who have just applied for a demat account but have not yet been issued a demat account number and might be a little too late to apply for the issue.

Open a demat account through a broking company and get a DP ID, says this advisor. Apply for the IPO with this DP ID but with the DP Client ID not filled in or with any random DP Client ID.

When the allotment is made, the registrar for the IPO will see a mismatch in your name and the DP Client ID, and a letter will be sent to you about the mismatch.

By this time you would have actually got your DP Client ID which you can then send to the registrar. After verifying your identity, the IPO registrar will send the shares to your demat account.

Mr Chandramohan Dawar, Director, Single Window Securities, said all manner of advice is now available on websites and that such a convoluted method of applying was not necessary at all.

One can in fact apply for the IPO with just the DP ID number, and even before the demat account number is actually issued, he said. One only has to get a letter from the broker that one has indeed applied, he said.