To understand BO account, go back to what happened when you held physical shares. Then you were the registered owner of the shares. That means your name directly appeared in the registry of shareholders of the company and that is how transfers were made and that is how corporate benefits were paid out. When the shares shifted to demat, the regulator decided that the principal depository; NSDL or CDSL, in this case, will be the registered owner of shares. Against these certificates, they will issue equivalent credits to the beneficiaries. So now you are not the registered owner of the shares but NSDL or CDSL is the registered owner of the shares. But they cannot do anything with the shares as you are the beneficiary owner of the shares. That is why you open BO (Beneficiary owner) account or BO account with NSDL or CDSL.
Once the documents are all submitted and the agreement is executed properly, the DP will take a couple of day’s time to verify the documents and get the compliance approval. Once the compliance approvals have been received your account will be opened. The DP will then allow you a Beneficial Ownership code (BO) which will be your account number. Your full DP account number will be a combination of your DP id and your BO code. Your DP code must be mentioned in the same manner at the time of applying for the IPO.