In the last few years, Initial Public Offerings (IPO) have come into public focus with many bumper listings. In addition, the simplification of the IPO application process has made IPOs extremely popular. Earlier, brands needed to file and submit an IPO application physically. But with increasing participation in the primary market and its growth, companies can now do it from the comfort zone of their homes.
Published on 13 July 2022
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Even after a change in the medium, many people are still confused about the technical terms in the IPO application. One of the elements creating confusion is the DP name. To understand the term, you must first understand the meaning of depositories and depository participants.
What are Depositories?
Before we understand depositories, we must look at the operations of the stock market.
These securities are not in physical form, so you cannot keep them in the physical locker. Instead, they are in electronic or dematerialised form. The investor holds them in the Demat account run by the depositories. India has two depositories - National Securities Depository Limited (NSDL) and Central Depository Services Limited (CDSL). These depositories store the securities that are transacted between one owner and the other on the stock exchanges.
What is a Depository Participant?
As defined above, depositories store the securities. But they do not have any direct engagement with the companies issuing the securities or the investor. Depository participants are firms registered with SEBI that can serve as an interface between the investors and the depositories. From banks to brokers, any institution can register as a depository participant.
What is the DP Name in the IPO Application?
After you understand how depository is different from depository participant, you will know what DP name is in the IPO application. The depository participant’s name is the DP name. You need to enter the name of the broker in the field for DP name.
In the application form, before the DP name, you need to enter the Depository, DP ID, and DP account. For the depository section, you need to enter CDSL or NSDL.
A depository participant receives a DP ID number from the depository. It is not the same as the 16-digit Demat account number. The DP ID includes the first eight digits of the Demat account number. It is easy to identify the Demat account numbers that CDSL and NSDL provide. The account numbers provided by CDSL start with a numeric digit, while the Demat account numbers provided by NSDL start with IN.
Why is a Depository Needed?
With the help of a depository, you can eliminate the risk of holding physical securities. In the past, investors had to check if the transfer of their shares was successful. They also needed to ensure that there was no damage, loss, or theft. With the depository system, there are no such risks as securities are transferred electronically.
Who Regulates Depository Participants and Depositories?
The registration, inspection, and regulation of the entities are undertaken by the Securities and Exchange Board of India. A depository participant is accountable to SEBI. After registering with the SEBI, the operations of a DP begin. The DP must also have a recommendation from CDSL or NSDL.
Summing Up
The process to submit an IPO application has become simpler to a large extent. But many details need to be filled in, often confusing individuals. If you understand the roles and functions of depository participants and depositories, you can easily fill out the application for an IPO without any hassles.
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One of the major talking points in the year 2021 was the Initial Public Offerings or IPOs of several leading companies in India. From giants in the food retail industry to companies offering digital payments, the year has seen the launch of IPOs across various sectors - IPOs that created almost unprecedented buzz and attracted the interest of veteran investors and first-time investors alike.
When a company wants to raise funds from the public by allowing subscription to its securities, it has to draft and file a prospectus. A prospectus is a legal document that details the company’s financial securities – stocks or equities – available to the public. All companies issuing shares to the public are required to file a prospectus with the regulator for prospective customers, enabling them to make informed investment decisions.
The full form of DP is Depository Participants. In India, there are two depository participants - NSDL and CDSL.
Any entity that lets an investor buy or sell securities like bonds and stocks in a paper-less manner is known as a depository. It can be thought of as a bank. To use the services of depositories, an investor needs to open an account with the Depository through a depository participant. The process is similar to opening an account with the bank. When you hold shares in this account, it is similar to holding money in the bank.
The entity where an investor’s stocks and bonds are held securely in electronic form is a depository. It maintains ownership records and facilitates the trading of dematerialised securities. When it comes to a depository participant, it is an agent of the depository.
DP ID is the Depository Participant Identification. The number is allotted to the Depository Participant like a financial institution, bank, or broking firm by the NSDL and CDSL. The Demat account number of the holder combines the DP ID and Customer ID.
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One of the major talking points in the year 2021 was the Initial Public Offerings or IPOs of several leading companies in India. From giants in the food retail industry to companies offering digital payments, the year has seen the launch of IPOs across various sectors - IPOs that created almost unprecedented buzz and attracted the interest of veteran investors and first-time investors alike.
When a company wants to raise funds from the public by allowing subscription to its securities, it has to draft and file a prospectus. A prospectus is a legal document that details the company’s financial securities – stocks or equities – available to the public. All companies issuing shares to the public are required to file a prospectus with the regulator for prospective customers, enabling them to make informed investment decisions.
The full form of DP is Depository Participants. In India, there are two depository participants - NSDL and CDSL.
Any entity that lets an investor buy or sell securities like bonds and stocks in a paper-less manner is known as a depository. It can be thought of as a bank. To use the services of depositories, an investor needs to open an account with the Depository through a depository participant. The process is similar to opening an account with the bank. When you hold shares in this account, it is similar to holding money in the bank.
The entity where an investor’s stocks and bonds are held securely in electronic form is a depository. It maintains ownership records and facilitates the trading of dematerialised securities. When it comes to a depository participant, it is an agent of the depository.
DP ID is the Depository Participant Identification. The number is allotted to the Depository Participant like a financial institution, bank, or broking firm by the NSDL and CDSL. The Demat account number of the holder combines the DP ID and Customer ID.
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Sharekhan Comtrade Private Limited does, however, gather certain information that is provided by you to the Web Site. Sharekhan Comtrade Private Limited believes that by collecting this information Sharekhan Comtrade Private Limited is able to provide you with a personalised web experience, and to assist its own sales team and advertisers in efficiently reaching an appropriate audience.Sharekhan Comtrade Private Limited does, however, gather certain information that is provided by you to the Web Site. Sharekhan Comtrade Private Limited believes that by collecting this information Sharekhan Comtrade Private Limited is able to provide you with a personalised web experience, and to assist its own sales team and advertisers in efficiently reaching an appropriate audience.
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The Web Site uses an order form for customers to request information, products and services. The Web Site collects visitors' contact information (like their mobile number or e-mail address), unique identifiers (like their PAN number) financial information (like their account or credit card numbers) and demographic information (like their pin code, age or income level). Contact information from the order form is used to send orders, information about Sharekhan Comtrade Private Limited, and promotional material from some of Sharekhan Comtrade Private Limited's partners to the visitors of the Web Site. The visitor's contact information is also used to get in touch with the visitor when necessary. Financial information that is collected is used to check the users' qualifications and bill the user for products and services. Unique identifiers (such as PAN numbers) are collected from Web Site visitors to verify the user's identity.
Surveys and Contests:
The Web Site's online surveys ask visitors for contact information (like their mobile number or e-mail address) and demographic information (like their pin code, gender, age or income level). The Web Site uses contact data from its surveys to send the user information about Sharekhan Comtrade Private Limited and promotional material from some of Sharekhan Ltd.'s partners. The customer's contact information is also used to contact the visitor when necessary. Users may opt-out of receiving future mailings; see the choice/opt-out section below. Demographic and profile data is also collected at the Web Site. The Web Site use this data to tailor its visitor's experience at the Web Site, showing them content that it thinks they might be interested in, and displaying the content according to their preferences. This information is shared with advertisers on an aggregate basis.
Sharekhan Comtrade Private Ltd run contests on the Web Site in which we ask visitors for contact information (like their e-mail address). Sharekhan Comtrade Private Limited uses contact data from its contests to send users information about Sharekhan Comtrade Private Ltd. and promotional material from some of our partners. The customer's contact information is also used to contact the visitor when necessary. Users may opt-out of receiving future mailings; see the choice/opt-out section below.
Third-Party Advertisement Servers:
Sharekhan Comtrade Private Limited engages the services of an outside advertisement company to display advertisement on the Web Site. These advertisements may contain cookies. While Sharekhan Comtrade Private Limited uses cookies in other parts of the Web Site, cookies received with banner advertisements are collected by the Advertisement company, and Sharekhan Comtrade Private Limited does not have access to this information.
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Disclosure of Customer Information :
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Public Forums :
The Web Sites makes chat rooms, forums, message boards and/or news groups available to its users. Please remember that any information that is disclosed in these areas becomes public information and you should exercise caution when deciding to disclose your personal information.
Supplemental Information :
The Web Site supplements the information that you provide with information that is received from third parties.
The Web Site DOES NOT entice by the prospect of a special game, prize or other activity, to divulge more information than is needed to participate in the activity.
Further to the above, in light of the recently notified Information Technology (Reasonable security practices and procedures and sensitive personal data or information) Rules, 2011. (Hereinafter referred to as the Rules)
The following shall be deemed to be sensitive information :
Password;
Financial information such as Bank account or credit card or debit card or other payment instrument details;
Physical, physiological and mental health condition;
Sexual orientation;
Medical records and history;
Biometric information;
Any detail relating to the above clauses as provided to body corporate for providing service; and
Any of the information received under above clauses by body corporate for processing, stored or processed under lawful contract or otherwise:
provided that, any information that is freely available or accessible in public domain or furnished under the Right to Information Act, 2005 or any other law for the time being in force shall not be regarded as sensitive personal data or information for the purposes of Rules.
Collection of Information:
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In order to provide enhanced trading experience to the client.
In order to provide any further information to be provided to regulators.
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Clients would be allowed an option not to disclose any information to be collected, provided the same is in compliance with regulatory requirements.
Disclosure of information:
Disclosure of sensitive information would be as per the terms agreed by the clients. For any change in such terms, the clients would be informed.
Provided no consent may be required in case the same is being shared as per compliance guidelines or as required by regulators.
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Sharekhan Comtrade Private Limited shall maintain reasonable security practices and procedures and maintain a comprehensive documented information security programme. In the event of an information security breach, Sharekhan Comtrade Private Limited or a person on its behalf shall be required to demonstrate as and when called upon to do so by the agency mandated under the law, that there have implemented security control measures as per their documented information security programme and information security policies and information security policies that contain managerial, technical, operational and physical security control measures that are commensurate with the information assets being protected with the nature of business.
KYC Languages
Download Client Registration Documents (Rights & Obligations, Risk Disclosure Document, Do's & Don't's) in Vernacular Language :
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