Earn Extra Income from Shares in Nepal

We can see many of the youths still do not have DEMAT Account and do not have much idea about share trading. From this blog, you will learn the procedure to open required accounts to apply in IPOs and trade in shares. 

Investing in NEPSE has been much easier through the years. I still remember the days when people used to stay in line for hours to submit IPO forms, people had to invest large sums of money to be allotted shares in IPO, Share Certificates were in physical form and took weeks to transfer in one's name, shares took moths for listing.

Now, with various improvements in Nepalese Share Market through the past few years, you can apply for IPO within a minute and can also purchase/sell shares through online trading.

Here's how you can make some extra money from Share Market (Upto Rs. 100,000 per annum depending on the IPO issues) with usually no risk at all and with nominal investment (below Rs. 5000):

1) Open a Bank Account

                            At any bank, preferably "A" Class commercial bank. It's usually free of charge to open a bank account or with Rs. 150 charges.

2) Open a DEMAT Account

                            This is the account where your share is placed. This service is provided by many banks, capitals, stock brokers, portfolio managers, etc. Usually costs Rs. 150 annual charge. Meanwhile Prabhu Capital Limited is providing an offer waiving the charges for first 3 years. This offer is expiring soon.

3) Now, when there is an initial Public Offering of a company (Usually lasts 4 days), you can apply for shares: 

        - By going to the bank and filling up the ASBA form.

        - Or by applying Online through Meroshare.

(For applying through Meroshare, you need to obtain meroshare login details from where you have opened the DEMAT Account. It costs Rs.50 charge annually. Then, contact your Bank and obtain the "CRN Number". This is all done free of cost. Then login to https://meroshare.cdsc.com.np/ and apply for the IPOs of Companies. You will be asked the CRN number, provide the one provided by your bank to you.)

4) While applying for shares, you need to have the applied money in your bank account (usually require nominal amount of 1000-2000 unless there is a huge issue and you want to apply for large amount).

Upon application, the amount is blocked in your Bank Account which is the share is allotted shall be deducted against the shares, otherwise released. The allotment takes place within a week of close of IPO issue.

5) Upon allotment, the shares shall be listed in NEPSE within days and shall also be shown in your DEMAT account. Then the shares are traded in the secondary market (usually a price higher than the face value of shares, which is your profit).

Now, you can hold the shares for the long term or can sell the shares in the secondary market and realize the profit.

There are many more IPOs coming the way, esp various life and non life Insurance companies. 

Some extra income doesn't hurt, does it?

In next blog, I will be writing detailed procedure for applying IPOs and selling them in secondary market. 

Stay Tuned. 

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