Ekkay Magic, a Small IT company has launched a product which facilitates retail investors to apply for IPO (Initial Public Offering) by just sending an SMS. Currently retail financial investors have to spend many hours while applying for IPO application (getting the forms and submitting it) although few big broking companies also offer online application facility.
The SMS based IPO application service is broker based and thus is not open for all the independent appliers. The service works by allowing broker to set up a server to receive IPO application in a prescribed manner. The broker then saves the record at his end for the IPO application. The investor gets a transaction ID when they submit the SMS and fulfills the Payment obligation in a broker prescribed way. The service also notifies investors about latest IPO related updates through SMS.
Some Other FAQ’s:
What is the general response time?
Approx in 30 seconds Customer receives answer by SMS.
What if the format send by the customer does not matches with the decided one?
If the format send by the customer does not match with the decided one then, informing message is sent to the customer.
What will be the cost & size of a single SMS?
The cost & size of a single SMS depends on the SMS provider (Currently 160 Character).
What is the Confirmation of the applied IPO?
The report is generated on the website giving the details of the applied IPO. And also the SMS is sent to the Customer conforming about the IPO along with his Customer Id and Transaction Id.
What is the authentication procedure?
The customer sends message along with their username and Password. The Mobile No is also use as a Identification. The customer will have to apply for the IPO with their own registered no only.
Would it be possible to include payment option in the SMS IPO?
It can be implemented on the Client request.
What if I need to change the IPO lot size?
It can be implemented on request.
What if I need to apply for more IPOs for the same company using the same mobile?
As per the rules, we cannot apply for the same IPO more than once.
What if a person applied using a Mobile IPO and also filling physical Form?
One can check that it has been applied, so he can deny the person.
How to reconcile the SMS IPO application with Filled IPO Forms in physical?
You can check it for the applied IPO from our web application and than you can proceed for that.
The service has potential to attract many retail investors but also needs to comply with timely SEBI guideline. The investors although gets huge relief as they can apply for an IPO through their broker by SMS but may have to fork out additional time in fulfilling payment obligations. Many broking companies like Reliance Money also allow facilities to connect bank accounts with their broking accounts to fulfill such arising payment crisis. The system may also get shot in the arm as mobile penetration is breaking newer and newer records.
The major deterrent for this IPO based application is the response which they get from big broking houses although in general companies leave no stone unturned to attract investors for IPO as they get hefty commission for it. If this sort of initiatives gets implemented in combination with payment gateways then it could proliferate financial services boom in core of India.
I guess Mobile IPO, is a step further in the development of the mobile banking business in India.
I think its a good step for those who do not have the facility to apply for IPOs online (and I they form a bulk of the investors) However, this facility may not be of much use to people who already use the online facility of applying for IPOs, since an online application does not cost anything.
@Nishant
The main problem would still be the payment obligation for IPO applications,users may still have to spend time in sending cheques to broker,So the process needs further simplification.The IPO SMS is also broker dependent.
Applying for an IPO by an SMS ..wow ..making life simple and easy. and this sms goes thrrough their broker.. and reliance money connecting to different bank accounts ..to avoid payment problems.. wish others start doing the same.. useful article..
Mobi- Finance .. the new lingo i .. suppose.. as nishant said needs to be simpliefied further .. bt baby steps have begun .so we can hope for somehtng more and better from the brokers like ICICI direct, RMoney, share Khan and the others..
@Raghav. Yes, I agree. Simplification could be as ‘simple’ as linking the bank account to a mobile number (or linking the mobile number to the Demat account linked with the bank account) and some security checks to verify that a ‘real’ investor is filling up an IPO. So once you apply for the IPO, money will be automatically debited from the Bank account.
Also, to boost usage of mobile for filling IPOs, the service, atleast initially, has to be free for the investors and the costs should be borne by the brokers.