What is ASBA and how it is used for making payments for IPO applications?

What is ASBA and how it is used for making payments for IPO applications?

CONCEPT OF ASBA: -

  • ASBA stands for Application Supported by Blocked Amount. ASBA is a process used to apply for Initial Public Offerings (IPOs) or Follow-on Public Offerings (FPOs) in India.
  • Under this process, investors' application money remains in their bank accounts but is temporarily blocked until the shares are allotted. Once the shares are allotted, the blocked amount is debited from the investor's account, and the remaining amount is unblocked or released.
  • Investors may submit their ASBA applications to these SCSB (Self Certified Syndicate Banks) (WEB).
  • ASBA is a method of permitting banks to block the funds in the customer’s bank A/c for IPO applications till the allotment process is complete. The process of blocking the fund is called lien marking in banking terms.
  • Investor cannot use the blocked amount but continue to receive interest on the blocked amount.
  • The ASBA route of applying for the IPO is the simplest, fastest and most convenient way to apply in an IPO.
  • Amount to be withdrawn or released depends upon the status of allotment: - 
  • In case of Full Allotment: - total blocked amount will be withdrawn.
  • In case of Partial Allotment: - Amount for allocated shares only will be withdrawn and rest will be released.
  • In case of No allotment: - total funds will be released.

1).Online Application form Of ASBA: -

    1. Log in to your Net banking account and click on ‘IPO Application’.
    2. Select the specific IPO you wish to invest in and choose up to 3 bids. 
    3. Fill in the application form with the necessary details in the redirected IPO platform. 
    4. Fill in details such as PAN number, bid price, bid quantity, and 16 digit DP number.
    5. Place and confirm your order.
    6. After you submit your application successfully, you can check the status on NSE and BSE websites. 

2).Offline Application Process: -

    1. Download the application form available from NSE and BSE websites. 
    2. Fill out the details such as name, PAN details, bid price, bid quantity, Demat account number, bank account number and IFSC. 
    3. Submit the duly filled application form at the Self-certified Syndicate Bank. 
    4. Collect the receipt.
    5. The bank will block the amount and upload the details on the bidding platform. 

3).ASBA Through UPI :-