Application Supported by Blocked Amount (ASBA) refers to the application supported by the blocked amount. ASBA helps pay when applying for an IPO. No demand draft or check has to be given while applying for an IPO. You can apply for an IPO through the bank and the bank has a valid right on your deposit. The money remains in the bank account till the shares are allotted. Generally speaking, ASBA is an application to subscribe to an issue under which the bank account is given the right to withhold the application money.
Why ASBA only?
- Through this, problems related to refunds are avoided.
- Interest is available on the blocked amount in the ASBA bank account. This interest is also available on the amount deposited during the application process.
Your application money (if applied through ASBA) is debited from your bank account only when your application is selected for allocation. If the issue is withdrawn or deemed to be a failure, the money is returned to the linked ASBA account.
Who can apply through the ASBA process?
- One who is an individual investor and who is applying for shares up to Rs 2 lakh.
- On applying through this, you can bid on the cut-off of the same option
- You cannot bid under any of the reserved categories. You have to agree not to amend the bid.
- You can apply by blocking money in a bank account through self-certified syndicate banks.
How to apply for an IPO through ASBA?
There are two ways you can apply for an IPO through ASBA, which are –
- You can apply for a public issue through your bank account. You have to fill the name, PAN number, Demat account number, bid amount and price and other important details.
- You will then have to submit the ASBA application form to the bank branch that has been designated as a self-certified syndicate bank for ASBA services.
- The bank then uploads the details of the application on the bidding platform.
- Be sure to fill in the correct details in the form, otherwise your application may get rejected.
You can take the ASBA form from designated bank branches that are authorized as self-certified syndicate banks. You can see its list on BSE, NSE or SEBI website.
If offered by the bank, you can also apply online through internet banking facility. Banks like HDFC, SBI, Axis, IDBI provide this facility. Follow the following steps to apply for an online IPO through ASBA.
- You will need to sign in through a net banking account. Then you have to click on the ‘IPO Application’ link.
- Select the IPO you wish to apply for. You have to mention 3 bids.
- After this you have to fill the depository details (NSDL and CDSL).
You can also apply through ASBA e-form available on NSE website. For this, you have to download the ASBA e-form. You will find this form on the NSE website. You can download the bid-less application form by visiting the NSE website. You can also fill the form online. You can download the form and submit it to the designated bank branch.
When does an ASBA IPO application get rejected?
- If there is no discrepancy in your application form, it may get rejected due to insufficient funds in your bank account.
- In case the information given by the applicant is incorrect.
- In case of difference between the name of the PAN card holder and the demat holder.
- On multiple applications by the same applicant through ASBA.
UPI Supported ASBA for IPO
- 47 banks provide UPI facility. They also provide IPO facility. If your mobile number is updated in the bank, then set the UPI ID by downloading the UPI enabled application of banks from the App Store. Next choose an ID.
- After this enter the UPI ID on your IPO application form. After processing the form by the bank and registered transfer agent, you will get a notification on the Bhima UPI app.
- Use the UPI PIN to block the required amount based on the number of shares you want to bid for in the IPO.
- Please check the application details before submitting.
Self Certified Syndicate Bank
Self-certified syndicate bank is a bank which provides the facility to apply through ASBA. An application has to be submitted in this bank.