IPO Allotment Probability

Nepal's IPO market has been one of the most democratized in South Asia — any Nepali citizen with a DMAT account and a linked bank account can apply for IPOs through the Mero Share platform. But IPO allotment confusion is widespread, especially about how the lottery works and whether applying for more kitta helps.

How Nepal IPO allotment works

Nepal's capital markets regulator SEBON mandates a computerized lottery system for oversubscribed IPOs:

1. All valid applications are entered into a lottery pool 2. The lottery system randomly selects applicants to receive the minimum allotment (typically 10 kitta) 3. Selected applicants receive exactly the minimum allotment — not the amount they applied for 4. Remaining shares (after minimum allotments) may be distributed in a second round at higher allotments

Applying more kitta does NOT increase your allotment chances

This is the most common misconception. In Nepal's lottery system, every unique applicant (identified by their DMAT account) has exactly one lottery entry. Applying for 10 kitta vs 1,000 kitta gives you the same probability of winning the lottery.

Factors that determine allotment probability

- Total shares issued - Total valid applications (DMAT accounts) - Subscription ratio (e.g., 10x oversubscription → ~10% allotment probability) - Whether the IPO has a retail category quota

Meroshare application tips

- Apply from multiple household members' DMAT accounts (legal — different individuals) - Ensure your bank account has sufficient funds on the application date - Apply early — the system occasionally has last-minute capacity issues - Check for kitta scaling: some IPOs have categories (10 kitta, 20 kitta tiers)