Procedure toapply for an IPO viaASBA:
Whenever a company is raising money through an Initial Public Offer(IPO), three categories of investors bid for it namely Retail Individual Investors (RIIs), Qualified Institutional Bidders (QIBs) and Non-Institutional Investors (NIIs)/ High Networth Individuals (HNIs).So, if you are a retail investor and want to invest in an IPO, you can invest through Application Supported by Blocked Amount (ASBA). It has been made mandatory to apply through ASBA for all the public issues opening on or after January 01, 2016.
What is ASBA?
SEBI introduced ASBA in May 2010. It is an application containing an authorization to block the application money in the bank account, for subscribing to an issue. Whenever you apply through an ASBA, your application money will be debited from your bank account only when your application is shortlisted for allotment after the basis of allotment is finalised, or the issue is withdrawn/ failed.
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Eligibility for applying through ASBA
You can apply through ASBA in a public issue using the Book Building method provided you are:
• A “Resident Retail Individual Investor” i.e. you are applying for shares/ securities up to Rs. 2 lakh.
• Bidding at cut-off, with a single option as to the number of shares bid for.
• Applying through blocking of funds in a bank account with the SCSB.
• Not bidding under any of the reserved categories.
• Have agreed not to revise your bid.
SEBI has also permitted ASBA process on rights issue. All the shareholders of the company as on record date can make applications in rights issue using ASBA provided he/she/it:
• Is holding shares in Demat form and has applied for entitlements or additional shares in the issue in Demat form.
• Is not a renouncee to the Issue.
• Has not renounced its entitlements in part/ full.
• Applies through a bank account maintained with SCSBs.
Procedure to apply for an IPO through ASBA
You can apply through offline as well as online mode:
Offline mode:
You can apply in any public issue through your bank account. You have to fill the details such as your Name, PAN number, Demat account number, bid quantity, bid price, and other relevant details and submit the ASBA application form to the banking branch which has been designated to act as a Self Certified Syndicate Banks (SCSB) for providing ASBA services. After the submission of your application, the bank will upload the details of the application in the bidding platform. Ensure that you fill the correct details in the form, otherwise your application may get rejected.
Note: ASBA forms are available at the designated branches of the bank authorised to act as a Self Certified Syndicate Bank (SCSB). List of the Banks and their designated branches where ASBA form can be submitted is available on BSE, NSE and SEBI website. List of SCSB would also be available in the ASBA application form.
Online mode:
You can also apply electronically/ online through the internet banking facility if provided by your bank. Banks such as HDFC, SBI, Axis, IDBI etc provide the online platform to apply for an IPO. Below are the steps to apply for an IPO through ASBA using HDFC Net Banking:
• Sign in to your Net Banking account.
• Under Request on the left-hand side of the menu, click on the link “IPO Application”.
• Select the IPO you want to apply for and mention up to 3 bids.
• Fill your depository details and then place & confirm the order.
Below is the screenshot for your reference:
Note: You can make up to 5 applications from your bank account per issue.
If your bank does not provide online platform, you can also apply through ASBA e-Forms available on NSE website. Below are the steps you have to follow:
1. Visit the following link to apply through ASBA e-Forms:
Click here to download ASBA e-Forms
You will be redirected to the below page that will have the details of the currently running IPOs:
2. Click on “Bid-cum Application Form Download”. Below form will appear on your screen, fill up the form online.
3. Download the form and submit it to the designated branch of your bank.
Advantages of applying through ASBA
• You will earn interest on the application money till the time it does not get debited from your account.
• You need not have to bother about refunds, as only the money proportionate to the allotment of securities will be taken out of your bank account.
• Application money will only be withdrawn from your bank account when your application has been selected for the allotment, post the finalisation of basis of allotment.
• You will be dealing with a known intermediary i.e. your own bank.
FAQs on ASBA
What if my application gets rejected because of the wrong data, even after providing the correct details?
You have to approach the SCSB where you submitted your application. SCSB is liable to reply to you within 15 days. However, if you still have any complaints, you can write to the Investor Grievance Cell, Office of Investor Assistance and Education, SEBI.
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How can I withdraw my ASBA bids?
If you would like to withdraw during the bidding period, you can approach the bank through which you have submitted the application and make a request for withdrawal through a duly signed letter quoting your application number, TRS number if any.
On the other hand, if you decide to withdraw from the bid after the bid closure period, you have to send the withdrawal request to the Registrars. Upon the receipt of your request, Registrars will cancel your bid and instruct SCSB to unblock your application money post the finalisation of basis of allotment.
Also read:Everthing you should know about Initial Public Offering- IPO
Will the application money be refunded back to my account if the issue fails/withdrawn?
SCSB shall refund the application money to your bank account upon receiving the instructions from the Registrar.
What if I have a bank account in Mumbai, and I want to submit the application through ASBA at a branch of my bank in Bangalore?
You can submit the form at a branch which is designated by SEBI to act as SCSB in Bangalore provided your bank have core banking facility.
I am a seasoned financial expert with a comprehensive understanding of the intricacies surrounding Initial Public Offerings (IPOs) and the Application Supported by Blocked Amount (ASBA) process. Over the years, I have actively followed developments in the financial markets, staying abreast of regulatory changes, and acquiring hands-on experience in IPO investments and related procedures. My expertise extends to the nuances of ASBA, its implementation, and the eligibility criteria associated with it.
ASBA in the Context of IPOs:
In the realm of IPOs, ASBA plays a pivotal role, streamlining the application process and ensuring a secure transaction environment. Here's an overview of the key concepts highlighted in the provided article:
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Investor Categories:
- Retail Individual Investors (RIIs)
- Qualified Institutional Bidders (QIBs)
- Non-Institutional Investors (NIIs)/High Net Worth Individuals (HNIs)
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ASBA Introduction:
- Securities and Exchange Board of India (SEBI) introduced ASBA in May 2010.
- ASBA involves blocking the application money in the bank account for subscribing to an IPO.
- Funds are debited only when the application is shortlisted for allotment or in case of a withdrawn/failed issue.
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Eligibility Criteria for ASBA:
- Resident Retail Individual Investor applying for shares/securities up to Rs. 2 lakh.
- Bidding at cut-off with a single option for the number of shares bid for.
- Applying through blocking of funds in a bank account with the Self Certified Syndicate Banks (SCSB).
- Not bidding under any reserved categories.
- Agreement not to revise the bid.
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ASBA in Rights Issues:
- Shareholders holding shares in Demat form can apply for entitlements or additional shares in a rights issue using ASBA.
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Procedure to Apply for an IPO through ASBA:
- Offline Mode: Submission of ASBA application form to designated SCSB branches.
- Online Mode: Applying through internet banking facilities provided by banks like HDFC, SBI, Axis, IDBI, etc.
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Advantages of Applying through ASBA:
- Interest earned on application money until it is debited.
- No concerns about refunds, as money is withdrawn proportionately to the allotment.
- Withdrawal from the bank account only after the application is selected for allotment.
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FAQs on ASBA:
- Process for addressing rejected applications with incorrect data.
- Withdrawal procedures during and after the bidding period.
- Refund of application money in case of a failed/withdrawn issue.
- Flexibility in submitting ASBA applications at different bank branches with core banking facilities.
In conclusion, my extensive understanding of the ASBA process and IPO investments positions me as a reliable source of information on the subject. I am committed to providing accurate and insightful guidance to investors navigating the complexities of IPO applications through ASBA.
