IPO of Mero Microfinance: How much to invest? Rs 5,000 or Rs 50 thousands or Rs 10 lakhs?

Mero Microfinance Bittiya Sanstha Limited is  floating its Initial Public Offering (IPO) of 6,12,000 unit shares worth Rs 6.12 crore from Falgun 27, 2072.The offer is set to close on Chaitra 01, 2072 at the earliest.

Interested investors must apply for a minimum of 50 units of share and they can apply for up to 10,000 units of share.

The microfinance company has set aside 24,480 unit shares for its employees and 30,600 unit shares for the existing six mutual fund companies. The mutual fund schemes are Nabil balance fund-1, NMB Sulav Investment Fund – 1, NIBL Sambriddhi Fund – 1,  Laxmi Value Fund -1, Siddhartha Equity Oriented Scheme, and Siddhartha Investment Growth Scheme- 1. Remaining 556,920 units shares are available to general public through this IPO.

Global IME Capital Ltd is the issue manager for the IPO.

Investors applying Rs 50,000 or below per application form are classified as small investors. Security Allotment Guideline 2068, states that at least 40% of the securities being offered in IPO must be allotted to the small investors. However, if the total amount from the small investors exceeds the 40% of the total collected amount then this rule does not apply.

Recent IPO/FPO of HIDCL and NIBL has collected well above Rs 40 arba per issue depicting the higher liquidity in the market. However, it is expected that this issue will not collect such high amount but will be oversubscribed by much more times than these previous issues of HIDCL and NIBL.

Looking at the number of shares being offered and the maximum amount that one individual/organisation can apply we have reached to the conclusion that it would be wise to apply either Rs 5,000 or Rs 50 thousands or Rs. 10 lakh per applicant.

Rs 5,000 or 50 units

This is the minimum amount/units one can apply in this issue. There is no doubt that applicant applying Rs 5,000 will fall under lottery system. So, lucky investors from this group will get 20% return on their investment i.e. 10 units of shares.

Rs 50,000 or 500 units

As discussed earlier, investors applying 500 units will be small investors. Usually in other IPOs investors who applied 500 units benefitted the most. However, due to small size of the issue the outcome may not be the same in this issue.

Rs. 10 lakhs or 10,000 units

 Rs 10 lakhs or 10,000 units are the maximum one investor can apply in this issue. Any applicant applying for more shares will be disqualified from the allotment process. Investor applying for 10,000 units can voluntarily include their PAN along with the application form. Applying such unit may give hope that investors in this category may get some share as many investors do not apply shares at this quantity.

A Word of Advice: Every investor fell under lottery system in allotment of IPO of Janautthan Samudayic Laghubitta Bikas Bank Ltd. and Kisan Microfinance Bitya Sansthan ltd due to high demand.  

Janautthan IPO allotment concludes; allotment through lottery to all applicants

Kisan Microfinance IPO allotment concludes through lottery to all 33,826 applicants

Need Money for IPO of Mero Microfinance? : Gold loan from NIC ASIA, loan up to Rs 5 crore within 1 hour