ASBA IPO

What is an ASBA IPO?

SEBI established ASBA (Application Supported by Blocked Amount) in 2008 as a mechanism that enables IPO seekers to reserve their funding without immediate transactions through bank-blocked deposits. Only upon successful allotment of shares to investors do the funds get debited from their bank accounts. The system provides benefits for both ease of use and safety as well as ongoing interest accumulation on the reserved funds.

ASBA serves as a method for investors in every category whether they are retail investors qualified institutional buyers or non-institutional investors.

• Retail Investors
• Non-Institutional Investors (NII)
• Qualified Institutional Buyers (QIB)

ASBA IPO Meaning

The application procedure through ASBA IPO enables investors to authorize their Self-Certified Syndicate Banks (SCSB) to freeze funds in their designated bank account for participating in Initial Public Offerings (IPOs). The money allocated through ASBA remains with the bank until the final allotment task becomes complete. When investors obtain allotment the required funds will be deducted from their account otherwise the blocked amount will be returned to them.

Key Benefits of ASBA IPO:

• The application process works without initial money transfers.
• Earn interest on blocked funds
• Faster refund process in case of non-allotment
• The system helps prevent both fraudulent and erroneous activities.

Features of ASBA IPO

• All investors must use either the digital or physical channels when applying for an Initial Public Offering IPO.
• The system maintains a blocking status for the application funds rather than performing a Funds Debit when the investor completes their application.
• During this period investors maintain full interest generation on their funding while it remains held.
• The funds automatically become available to the investor when no allotment is granted.
• The system operates without needing any mandate approval processes that exist within UPI.
• Only Self-Certified Syndicate Banks function as authorized parties to accept applications for Initial Public Offerings through ASBA.

ASBA IPO Application Process

1. ASBA IPO Online Application

Investors can apply for an IPO online through their Net Banking accounts. Follow these steps:

1. Log in to your Net Banking account.
2. Go to the IPO section under the investment tab.
3. Select the desired IPO.
4. Enter the applicant’s details (PAN, Demat details, etc.).
5. Enter bid details such as quantity and price.
6. Submit the IPO application.
7. A confirmation email/SMS will be sent.

Note: Some banks may require OTP authentication to complete the application process.

2. ASBA IPO Offline Application

Investors can also apply offline using a physical ASBA application form.

Steps to apply:

1. Download the ASBA IPO application form from the NSE/BSE website or collect it from your broker.
2. Fill in personal details (Name, PAN, Demat, etc.).
3. Enter bid details (quantity, price, and investor category).
4. Provide bank account details for ASBA blocking.
5. Sign the form and submit it at the nearest SCSB branch.
6. Collect the acknowledgment slip as proof of application.

ASBA IPO Application Form

Where to Get ASBA IPO Forms?

• Download from NSE or BSE websites.
• Obtain from your broker or lead manager.

Types of ASBA IPO Forms:

• Physical ASBA Form – For offline applications.
• E-Form (Online ASBA Form) – Available through NSE/BSE websites or Net Banking portals.

Pro Tip: NSE allows users to save their details to auto-fill forms for future applications.

ASBA Charges

• No charges are applicable for ASBA IPO applications.
• Banks do not levy any processing fee or transaction charge.

ASBA IPO Timing

• IPO Opening Day: Applications start at 10 AM.
• IPO Closing Day: Cut-off time is 5 PM, but some banks set it at 2-3 PM.

Check with your bank for specific cut-off times.

ASBA IPO Limit

• Investors can submit up to 3 bids for an IPO.
• Only one application per bank account is allowed.
• QIBs & NIIs cannot withdraw their bids once submitted.
• QIBs & NIIs must bid at a fixed price and not at the cut-off price.

ASBA Rules for IPO

• Investors must have a bank account with an ASBA-supported bank.
• Net Banking access is required for online ASBA applications.
• PAN & Demat accounts are mandatory.
• Only one ASBA application per PAN is allowed.

Third-Party ASBA IPO Application

• Earlier, some banks allowed third-party IPO applications.
• As of May 1, 2022, SEBI banned third-party ASBA applications.
• Now, each applicant must apply from their own bank account.

ASBA and UPI: Key Differences

Frequently Asked Questions (FAQs)

1. What is ASBA in IPO?

ASBA is a process where banks block the IPO application amount in an investor’s account instead of transferring it upfront. The amount is deducted only upon allotment.

2. How can I apply for an IPO using ASBA?

You can apply via Net Banking (Online) or by submitting a physical ASBA form (Offline) at an SCSB bank.

3. Is there any charge for ASBA IPO applications?

No, ASBA applications are completely free.

4. Can I use ASBA for multiple IPO applications from one bank account?

No, only one ASBA IPO application is allowed per bank account.

5. Is third-party ASBA IPO application allowed?

No, third-party IPO applications were banned by SEBI from May 1, 2022.

6. What happens if I don’t get an IPO allotment through ASBA?

If no shares are allotted, the blocked amount is released automatically.

7. Can I use UPI instead of ASBA for IPO applications?

Yes, UPI is another method for IPO applications, but it is primarily for retail investors applying up to Rs. 5 lakh.