IPO Application Through ASBA

ASBA allows you to apply for an IPO without transferring the application money upfront. Instead, the required amount is blocked in your bank account and remains there until the allotment process is completed.

• The IPO application amount is blocked in your bank account when you submit the application.
• Retail Individual Investors can apply for up to ₹2,00,000 in applicable mainboard IPOs.
• You may place up to 3 bid options where the IPO allows multiple bids.
• If shares are allotted, the required amount is debited from your bank account.
• If you do not receive an allotment, the blocked amount is released.
• You can submit an ASBA application through supported online or offline channels.

ASBA stands for Application Supported by Blocked Amount. It is a process regulated by the Securities and Exchange Board of India (SEBI) for applying to public issues.

When you apply through ASBA, you authorise a Self Certified Syndicate Bank (SCSB) to block the amount required for your IPO bid. The money continues to remain in your bank account while it is blocked.

During the IPO allotment process, the amount needed for the shares allotted to you is debited from your account. If you do not receive an allotment, the blocked amount is released.

For example, suppose your IPO application requires ₹15,000. Instead of transferring ₹15,000 when you apply, the bank blocks that amount. If shares worth ₹10,000 are allotted, the applicable amount is debited, and the remaining blocked amount is released.

You can submit an IPO application through ASBA using either an online or offline process.

Online process

1. Log in to the net banking service of your ASBA-enabled bank.
2. Open the IPO or investment services section available through your bank.
3. Select the IPO from the available open issues.
4. Enter the required lot quantity and bid price.
5. Submit your IPO application after checking the details.
6. Authorise your bank to block the required bid amount.
7. Save your application or reference number for future use.

Once the bank accepts the application, the required amount remains blocked until the allotment process is completed.

Offline process

1. Get the prescribed ASBA application form for the IPO.
2. Enter details such as your name, PAN, demat account details, bid price, lot quantity, and other required information.
3. Provide the details of the ASBA-enabled bank account from which funds will be blocked.
4. Sign the application and authorisation permitting the bank to block the required amount.
5. Submit the completed form to the designated branch or intermediary specified for the IPO.
6. Check all details carefully because incorrect information may lead to rejection.
7. Keep sufficient funds in the account until the allotment process is completed.

Under ASBA, you do not pay the IPO application amount using a cheque. The required amount is blocked directly in the specified bank account.

To submit an IPO application through ASBA, you need to meet the requirements applicable to the particular IPO and investor category.

You must have enough money in the specified bank account to cover your application amount.

Where applicable, retail investors can place bids at the cut-off price. For applicable mainboard IPOs, a Retail Individual Investor bid cannot exceed ₹2,00,000.

Eligible retail investors may also revise their bids during the bid period and withdraw them before the applicable closing deadline. The exact rules can depend on the IPO and investor category.

Applying through ASBA has several practical advantages:

• Funds remain in your account: Your IPO application amount is blocked instead of being transferred immediately.
• Online application: If your bank provides online ASBA services, you can submit the application through net banking without filing physical paperwork.
• Interest treatment: Since blocked funds remain in the bank account, applicable interest may continue to be calculated according to the terms of your account.
• No separate refund transfer: If you do not receive shares, the blocked amount is released instead of a separate refund being sent to you.
• Debit only after allotment: Only the amount required for the shares allotted to you is debited from the account.

For example, if you apply for shares worth ₹20,000 and receive an allotment requiring ₹12,000, only the applicable allotment amount is debited while the remaining blocked amount is released.

ASBA makes the IPO application process easier to understand because your application money remains blocked in your bank account until allotment is finalised.

You can apply through an eligible online or offline channel, depending on the facilities available. Before submitting an application, check your PAN, demat details, bank balance, bid quantity, and price carefully.

If shares are allotted, the applicable amount is debited from your bank account. If shares are not allotted, the blocked funds are released.