Initial Public Offering or IPO is a process by which companies raise funds from the market. Businesses need funds for many reasons and IPO is a great way to get it.
IPO is a process of offering shares of a Company for the first time. (A Company goes public for the first time).
This is an excellent chance to buy shares of a strong growth company at a low price. You can make a quick profit. Take a look at CSB Bank IPO. Shares of Catholic Syrian Bank made a strong debut on stock exchanges up 57% from the issue price. The CSB Bank stock listed at 41% higher at Rs 275 and extended gains to 54% at Rs 300. The CSB Bank IPO was priced in a price band of Rs 193-Rs 195 a share.
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ASBA or ‘Application Supported by Blocked Amount’ is a process of applying for an IPO in India. SEBI has made it mandatory for you to apply for IPO through ASBA. SEBI OR Securities and Exchange Board of India regulates IPO.
See Also: What Is An IPO?
ASBA is nothing but an authorization to block the IPO application money from your bank account. The IPO application through ASBA allows your bank to hold the subscription amount in your bank account until you accept allotment of shares. The bank simply blocks the subscription amount in your bank account when you apply for IPO. The money cannot be used for any other purpose. You do earn interest in the subscription amount.
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