Learn All About the DP Name in an IPO Application

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In the last few years, the growth of companies in the public market has become huge. More investors and traders look to invest their money in hot Initial Public Offerings (IPOs) and make profits. Investors need an easy way to sign in and invest as the popularity of IPOs has grown. In the past, when investors hoped to invest in IPOs, they had to fill out a physical form and submit it to the bank or the broker’s office.

But in today’s time, everything has become paperless, making it easy to apply for an IPO through a stockbroker. As you can apply for an IPO online, now there will be no need to visit any office to file for an IPO.

The depository participants (DPs) provide an easy way to invest in upcoming IPOs. To know more about the DP and DP names, you must understand the role of depository participants and the function of the DPs. In the IPO application, you will come across the DP name, DP ID, etc. You don’t need to worry about them. In this article, you will learn what the DP name is in the IPO application and more.

What is a Depository Participant?

A depository participant is a stockbroker registered with regulatory bodies like the Securities and Exchange Board of India (SEBI). A depository is a financial firm that holds your financial securities and provides a service and platform to trade in the stock market.

There are two types of depositories in India: the National Securities Depository Limited (NSDL) and the Central Depository Services Limited (CDSL).

The DPs can be aligned with the NSDL and CDSL. You can open a Demat account with any depositories that you want. When you own a Demat account, you get a Demat account number, and the shares you bought or got from the IPO will be stored in this account. DPs such as Share India provide free Demat account opening as well as a plethora of online trading features and benefits.

The depository participant acts as an intermediary between the depository and the stock exchange. All of the trading functions are done under the guidelines of SEBI. You can invest in stocks, mutual funds, options, and commodities using the DPs platform.

Functions of DPs

  • Account for investment: A DP can open an account for investors, which is the prerequisite to trade in the stock market.
  • Converting Physical Certificates: You can convert your physical financial certificates to electronic financial certificates using an online DP.
  • Quick Transfer: In online trading, you can get quick trading facilities where trading can be done in just a few seconds.
  • Transaction History: With the DPs, you can check the history of transactions, overview your Demat account, and do more from the stock trading platforms.

What is a DP ID?

A DP ID refers to the number that is allocated to the DPs by their depository. The DP ID number is a 16-digit number that is assigned to those seeking to make a debut in the financial market. The first eight digits represent the stockbroker, and the last eight digits represent the customer ID number.

Depository Participant in IPO Application

When you apply for an IPO, it is essential to put the name of the DP on the IPO form. If you do not know about the DPs or forget to enter the DP’s details, your IPO form can be rejected. You need to be careful about the IPO application and ensure that you are not scammed by any unknown DPs. Research well and invest with a SEBI-registered broker.

Advantages of DPs

Some of the benefits of DPs are:

  • As you apply for an IPO, all the electronic shares will be credited to your Demat account after the IPO is closed.
  • You can buy and sell securities in just a few seconds.
  • They provide a secure and easy way to access your holdings through online trading platforms. You can manage your investment with just a few clicks.
  • With the DPs, you can simply manage and track your investments. Along with the T+2 day settlement, you can easily get the final settlement of your trade online.

Conclusion

In the era of digitalisation, it is quite easy to get shares from the IPO. Investors can use the DP’s platform to apply for an online IPO. So, once you have understood the responsibilities of the depository participant as well as the depository, which is tied to the stock exchange, you can simply open an investment account and start trading.

There are minimal details required for the IPO application. To make it easy, you need a PAN card along with your DP name and DP ID. Through Share India, you can check the list of upcoming, recent, and closed IPOs. There are additional details about the IPOs on the Share India platform.

Frequently Asked Questions (FAQs)