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What is ASBA?

IndianMoney.com Research Team | Posted On Wednesday, January 08,2020, 05:53 PM

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What is ASBA?

 

 

ASBA or Application Supported By Blocked Amount helps you make payments when applying for an IPO. You don’t have to furnish demand drafts or cheques when applying for an IPO. You can apply for an IPO with the bank, which holds a lien on your deposits. The money stays in the bank account till the shares are allotted.

Why ASBA?

  • The problems associated with refunds are avoided.
  • The funds which are blocked in the ASBA bank account earn interest if they are held in the interest-bearing account even during the application process.

Your application money (This is if applied through ASBA) gets debited from your bank account only if your application is selected for allotment. It is cleared back into the linked ASBA account if the issue has been withdrawn or deemed to have failed.

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See Also: How to Apply for IPO?

What is ASBA?

Who can apply through ASBA Process?

  • You must be a resident retail individual investor who is applying for shares up to Rs 2 Lakhs.
  • You are bidding at the cut-off with a single option vis-a-vis the number of shares bid for.
  • You are not bidding under any of the reserved categories.
  • You have agreed not to revise the bid.
  • You are applying through blocking of funds in the bank account with self-certified syndicate banks.

How to apply for IPO through ASBA?

Offine Mode:

  • You can apply for a public issue through your bank account. You must fill details like name, PAN number, demat account number, bid quantity and price and other important details.
  • You then submit ASBA application form at the bank branch which has been designated to serve as a Self-Certified Syndicate Bank for ASBA services.
  • You then submit the application and the bank uploads details of the application on the bidding platform.
  • Make sure the right details are filled in the form or your application may get rejected.

You can find ASBA Forms at designated bank branches which are authorized to serve as Self-Certified Syndicate Banks. You can find the list on BSE, NSE or the SEBI website.

Online Mode:

You can apply online via the internet banking facility if offered by your bank. Banks like HDFC Bank, SBI, Axis Bank, IDBI offer this facility. Follow these steps to apply for an IPO through ASBA.

  • You must sign in from the Net Banking Account.
  • You then click on the link ‘IPO Application’.
  • You then select the IPO you wish to apply and mention up to 3 bids.
  • You then fill depository details (The depositories are NSDL and CDSL) and place and confirm your orders.

See Also: What Is An IPO?

You can also apply through ASBA e-forms available on the NSE website:

  • You download the ASBA e-form.
  • You click on the Bid-cum Application Form Download and fill up the form online.
  • You then download the form and submit this form at the designated bank branch.

When does ASBA IPO application get rejected?

  • There are insufficient funds in your bank account.
  • There’s a discrepancy in the application form.
  • The information you (applicant) has furnished is incorrect.
  • There’s a mismatch in the PAN card name and the demat holders name.
  • Multiple applications by the same applicant through ASBA.

UPI-backed ASBA for IPOs

Check if bank is live on UPI

  • There are 47 banks live on UPI which offers the IPO feature. If your mobile number is updated with the bank, set up a UPI ID by downloading your banks UPI-enabled application from the app store. You then select an ID.
  • You then enter the UPI ID on your IPO application form. After form is processed by the bank and registered transfer agent, you get a notification on the BHIM UPI app.
  • Use UPI PIN to approve the blocking of the amount required for the number of shares you have bid for in the IPO. (This is in the IPO application form).
  • Check application details before making a submission.

You have approved the amount to be blocked through ASBA route via UPI mandate registration process.

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