I’ve been getting a few queries regarding Reliance Power IPO from regular visitors of this site. I thought I’d share an important query from one of them. By sharing this, I hope a lot of other investors who read this blog regularly, having similar queries relating to applying in the mega Reliance Power IPO, will have their doubts cleared, as well. Both the question asked and my reply to it are reproduced below.

The Question asked by the Investor

Was reveiwing your tips for IPO on the internet and saw you ID there and wanted to ask a question. I do not have a DEMAT account and wanted to apply to Reliance IPO, I spoke to Reliance Money as they seem to offer a good DEMAT option. Now the issue was that IPO is just 1 week ahead and I cannot get the DEMAT account number before 3 weeks, they at Reliance Money said on phone that they are getting it done fast as many are like me, are new starters. Any way I went to their office and saw lot of new people applying for new DEMATs for the IPO, they say that account number will come in 20 to 25 days, but I shall get the DP number in a day or two and with that DP number I can apply for the IPO. Is that possible ? I saw the application forms of Reliance Power IPO and there was a column for DP number to be filled above the DEMAT number column. Can one apply with only the DP number with DEMAT account number expected by the day near Reliance Power IPO allotment date ?

The question is if that people at Reliance Money are not fooling me that DP is enough to get the IPO application through, and by the time of allotment, DEMAT account number will come and I can get the shares transferred to that. Now what if due to this incomplete application, I get my money locked up and am not able to trace if my application had met with allotment or not, and if so what will be future course of action? Hoping an early reply, I am to submit my cheque tomorrow to them to open the account, if it is of no use, and I get my IPO application money blocked, I shall not open the account especially for this Reliance Power IPO, so your urgent reply will matter a lot.

My reply to the above question regarding applying in the Reliance Power IPO

Yes, you can apply in the Reliance Power IPO, using the method mentioned above. This is how the process will take place.

1) You open a Demat account with Reliance Money sometime this week.
2) Reliance Money will give you the DP ID right away.
3) You apply for the reliance power ipo with the DP ID but with a no/wrong DP client ID
4) When allotment is made, since the registrar for the Reliance Power IPO sees a mismatch in the name and DP client ID
5) Allotment won’t be made a letter will be sent to you informing about the mismatch
6) By now you would have got your DP Client ID which you will have to send to the registrar
7) Reliance Power IPO Registrar sends the shares to your demat account after verifying your identity

Benefit - You can still apply in the Reliance Power IPO
Downside - Your Reliance Power IPO Allotment will get delayed and you will have to go through the hassle of faxing the registrar various documents.
Risk - In the unlikely situation of share prices falling after Reliance Power IPO Listing takes place, you will be helpless and will be unable to sell the shares allotted to you in the IPO, since it is likely to take anywhere between 2 to 4 weeks after the listing date of Reliance Power IPO, for you to get the shares of Reliance Power Limited in your demat account.

Note - A better way to apply in the Reliance Power IPO would be to apply in the name of your friends or relatives who already have a demat accoount but are not interested in applying in the Reliance Power IPO.