Question 1

What is the ASBA facility for IPOs?

Accepted Answer

The ASBA facility is a method that allows Self-Certified Syndicate Banks (SCSBs) to block the application amount in an investor's bank account. The key here is that the amount is *blocked*, not immediately deducted. This means that if your account earns interest, you'll continue to receive interest on the blocked amount until it is finally debited.

You can submit your ASBA request directly through your SCSB bank's online application or website.

For example, if you have a Citibank account and Citibank offers the ASBA facility, you can either submit an online application through Citibank's net banking services or pick up a physical form at a bank branch. The completed physical form would then be submitted, indicating your Citibank ASBA account number.

Question 2

When did ASBA become available?

Accepted Answer

The ASBA procedure was introduced by SEBI (Securities and Exchange Board of India) in a circular dated July 30, 2008. It officially became effective for all book-building public issues that opened on or after September 1, 2008.

ASBA was rolled out in phases, initially with certain restrictions and primarily for retail investors. Eventually, as of January 2016, ASBA became mandatory for all categories of investors, with the exception of anchor investors.

Question 3

What role does ASBA play in an IPO application?

Accepted Answer

ASBA is a payment method that allows banks to block the funds you've committed to purchase IPO shares. These funds are only blocked, not immediately deducted from your account. This means your money continues to earn interest until it is debited at the time of share allotment.

The ASBA facility has significantly simplified IPO trading and comes at zero cost. It has also eliminated the need for traditional payment methods like demand drafts and cheques for IPO applications.

Question 4

What does ASBA stand for?

Accepted Answer

ASBA is a method for applying to an IPO that uses a fund-blocking mechanism.

The full form of ASBA for IPOs is "Application Supported by Blocked Amount." To apply for an IPO through ASBA, you need to have an account with a bank that supports the ASBA facility.

This facility authorizes these specific banks (SCSBs) to block funds for your IPO application or any other public offering you subscribe to.

Question 5

How does the ASBA process work?

Accepted Answer

ASBA operates on a fund-blocking mechanism.

When you apply for an IPO using ASBA, your bank account isn't debited at the time of application. Instead, your ASBA application authorizes your bank to block the application amount in your account.

The blocked funds will continue to earn interest. The funds will only be debited from your account if you receive an allotment of shares. The amount debited will depend on whether you receive a full or partial allotment. If you receive a partial allotment, the remaining blocked funds will be released after the allotment on the refund date, and you can then use them.

To apply for an IPO with ASBA, you must have an account with a bank that supports the ASBA facility.

Question 6

What are ASBA-designated branches?

Accepted Answer

ASBA-designated branches are specific Self-Certified Syndicate Bank (SCSB) branches that offer the facility to apply for an IPO using ASBA.

Investors can apply for an IPO either online through these ASBA-supported banks using their Netbanking services or offline by visiting these branches in person.

Question 7

Can I cancel an ASBA application?

Accepted Answer

Yes, ASBA bids can be cancelled or withdrawn, but only by retail investors and only while the IPO issue is still open for subscription.

Investors can cancel their bid either online or offline. Employees can also cancel their bids, provided their application amount is Rs 2 lakhs or less. However, Non-Institutional Investors (NIIs) and Qualified Institutional Buyers (QIBs) cannot cancel or withdraw their bids once they have applied.

Question 8

How do I cancel an ASBA IPO application?

Accepted Answer

An ASBA IPO application can be cancelled online or offline, but only by retail investors and only during the IPO subscription period.

### Steps to cancel an ASBA application online

• Log in to the Net banking website or mobile app through which you applied for the IPO.

• Go to the IPO section and open your Order Book.

• Click on the transaction ID of your executed IPO application.

• Look for and click on the 'Withdraw Application/Cancel Bid/Delete Bid' button.

• Confirm the transaction.

### Steps to cancel an ASBA IPO application offline

• Contact your SCSB Bank or the intermediary through which you submitted the application.

• Submit a duly signed request for cancellation, making sure to quote your application number.

Note: On the last day of the IPO, some banks may not accept withdrawal requests after a certain time (e.g., 5 PM). It's always best to check with your specific bank for their exact procedure and deadlines.

There are no fees charged by any bank or broker for cancelling an IPO application, whether you applied through ASBA or UPI.

Question 9

Is it possible to cancel an ASBA application?

Accepted Answer

Yes, only retail investors have the option to cancel an ASBA application.

You can cancel your ASBA application online by logging into the Netbanking account you used for the application. Once logged in, navigate to the IPO section, click on the transaction number, and then select the option to withdraw, delete, or cancel the bid.

For offline IPO applications, you'll need to contact the specific intermediary (like your bank branch) through which you submitted the application. You'll then need to submit a formal cancellation request with your signature.

Question 10

How can I apply for an IPO if I don't use ASBA?

Accepted Answer

If you prefer not to use the ASBA route, you can apply for an IPO using your UPI ID. The UPI IPO application process also works on a fund-blocking mechanism, similar to ASBA. However, the UPI payment mode includes an additional step where you need to approve a mandate for the successful submission of your application. To apply through UPI, you will need a valid UPI ID.

You can also apply for an IPO through UPI using your broker's trading platform, provided your broker offers this UPI IPO facility.

Question 11

Can I withdraw the funds blocked for my ASBA IPO application?

Accepted Answer

No, you cannot directly withdraw the amount that has been blocked for your IPO application using the ASBA route.

When you apply for an IPO through ASBA, your bank places a lien on the application amount, effectively blocking it for the IPO. While you continue to earn interest on this blocked amount, you won't be able to use it for other purposes until the hold is lifted.

The lock on your IPO application amount will only be lifted if you withdraw or cancel your application, or if you do not receive any allotment or receive only a partial allotment. Your bank typically needs a few days to lift the lien on the amount after these events. Once the lien is lifted, you can then withdraw or use the funds from your account.

Question 12

What are the steps to apply for an IPO using ASBA?

Accepted Answer

You can apply for an IPO using ASBA either online through your Netbanking services or offline by submitting a physical IPO application form to your nearest broker or bank branch.

### Steps to apply online for an IPO through ASBA

• Log in to your Netbanking account with an ASBA-enabled bank.

• Look for the "IPO" or "Investments" tab.

• Select the specific IPO you wish to apply for.

• Enter your personal details such as PAN, email, and Demat account information.

• Input your bidding details (e.g., quantity and bidding price/cut-off).

• Submit your application.

Note: Your personal details are usually only required to be entered the first time you apply using your Netbanking services; they may auto-populate for subsequent applications.

### Steps for the offline ASBA IPO process

• Download the required IPO application form from the NSE or BSE website, or visit a bank that offers the ASBA facility and ask for the form.

• Fill in the following details on the IPO application form:

• Your Name, Address, Contact information, PAN, and Email details.

• Bidding details: desired Quantity and Bidding price (or select "Cut-off"), and the total Amount.

• Your ASBA Bank account number.

• Sign the form.

• Submit the completed application form to the nearest SCSB branch.

• Collect the acknowledgment receipt.

Question 13

How do I apply for an ASBA IPO online?

Accepted Answer

Applying for an ASBA IPO online is generally simpler than the offline method.

To apply for an IPO online using ASBA services, you will need:

• An account with any bank that offers ASBA services.

• Access to the Netbanking services for that account to apply for the IPO.

### Steps for online IPO application via ASBA

• Log in to your Netbanking account that offers ASBA services.

• Navigate to the "Investments" or "IPO" tab.

• Select the IPO you wish to invest in.

• Enter your bidding details (e.g., quantity and price).

• Submit your application.

Note: Personal details such as your Name, PAN, Demat account, and Email ID are typically auto-filled from your profile based on the information provided during your first application or registration.

Question 14

How do I make a payment using ASBA for an IPO?

Accepted Answer

You can make a payment through ASBA either online using your Netbanking services or offline by submitting the ASBA IPO application form to your nearest bank branch.

To pay online through Netbanking, you must log in to your ASBA-enabled bank account and select the IPO option through your bank's mobile app or website. It's crucial to ensure that your account has sufficient funds to cover the IPO application amount.

Once your application is submitted, the specified amount will be blocked in your bank account.

Question 15

Which banks offer the ASBA facility?

Accepted Answer

The ASBA facility is widely available with almost all major and recognized banks in India. This includes prominent banks like HDFC Bank, ICICI Bank, Citibank, Axis Bank, Bank of Baroda, IDBI Bank, HSBC, and State Bank of India (SBI), among many others.

Question 16

What's involved in filling out an ASBA IPO form?

Accepted Answer

The ASBA IPO forms typically consist of five main sections: Investor Details, Bidding Details, Payment Details, Signature, and the Counterfoil.

The National Stock Exchange (NSE) offers options to simplify this process:

• You can pre-fill some information on their website and then print the form.

• You can register and update your personal details as a one-time process, so for future applications, you only need to enter the bidding details.

• Alternatively, you can simply print a blank form and fill in all the details manually.

For online applications, you generally only need to enter the bidding details to submit your IPO application, as other personal information is often pre-filled.

Question 17

What was third-party ASBA?

Accepted Answer

Third-party ASBA was a facility that allowed individuals to submit multiple IPO applications from a single bank account.

Under this facility, an investor could submit up to five applications from one bank account. This was often used to apply for IPOs on behalf of minors. However, as of May 1, 2022, all banks no longer offer the option of applying through a third-party ASBA IPO. According to new regulations, the PAN number of the primary account holder in the bank account and the Demat account must be the same for an IPO application to be considered valid.

Question 18

Is it possible to apply for an IPO using ASBA?

Accepted Answer

Yes, you can absolutely apply for an IPO through ASBA. In fact, ASBA is now mandatory for all investors applying for public offerings, with very few exceptions.

You have the flexibility to apply either online or offline using ASBA. Online ASBA applications are processed through Netbanking, while offline applications involve submitting the ASBA IPO form to any nearby bank branch.

To use ASBA for an IPO, you'll need a bank account with one of the ASBA-enabled banks and, for online applications, access to their Netbanking services.

Question 19

What was a Non-ASBA IPO?

Accepted Answer

A Non-ASBA IPO refers to the previous IPO payment method where the bank account was immediately debited with the application amount.

Before ASBA was introduced, and for a period thereafter, payments for IPO applications were made using cheques and demand drafts, which meant funds were deducted upfront.

However, with the introduction of ASBA, IPO applications are now exclusively processed via ASBA or UPI, eliminating the Non-ASBA method.

Question 20

Can you explain the ASBA working mechanism?

Accepted Answer

ASBA is a facility provided by Self-Certified Syndicate Banks (SCSBs) that allows them to block the application amount in an investor's bank account for subscribing to an IPO.

### Steps to understand the working mechanism of ASBA

• Investors submit an IPO application either online or offline through ASBA.

• At the time of bidding, the respective intermediary verifies the details and blocks the required funds in the investor's bank account.

• The intermediary then uploads the bid details to the stock exchange's ASBA system.

• The registrar receives the aggregate final bid details from the stock exchange.

• The registrar, in consultation with the designated stock exchange for the issue, finalizes the basis of allotment.

• If an allotment is successful, the blocked amount is debited from the investor's account for the required amount of shares.

• In cases of no allotment or partial allotment, the registrar initiates a refund process, which unblocks the funds in the investor's account, making them available again.

Question 21

Is ASBA mandatory for IPO applications?

Accepted Answer

Yes, ASBA is generally required for all IPO applications and for investors across most categories.

SEBI has made ASBA mandatory for all IPO applications, with the only exception being for Anchor Investors.

Investors typically have two main options to apply for an IPO using ASBA:

• Online, by using the ASBA Netbanking services provided by their bank.

• Offline, by submitting a physical IPO application form to a designated bank branch.

Question 22

Where can I submit an ASBA form?

Accepted Answer

You can submit a physical ASBA form to any of the nearest branches of banks that offer ASBA services.

Alternatively, you can submit your application electronically using the Netbanking services of an ASBA-enabled bank.

Question 23

What's the process for applying for an IPO using ASBA?

Accepted Answer

You can participate in an IPO through ASBA either online or offline, provided you have a bank account that offers ASBA services.

### Steps to apply for an IPO through ASBA

• Choose your preferred mode of application: Online or Offline.

• For online applications, ensure you have Netbanking access. For offline applications, obtain the IPO form from a broker, bank branch, or download it from the exchange website.

• If applying online, log in to your Netbanking account and enter the necessary data for your application. If applying offline, manually fill in all the details on the IPO form.

• Submit the form either online or as a paper form at your nearest bank branch.

It's crucial to ensure that you have a sufficient bank balance, which should not be less than the total requested IPO application amount.

Question 24

What does 'IPO fund blocking' mean for ASBA applications?

Accepted Answer

IPO Fund Blocking is a feature of the ASBA route that specifically blocks the IPO application amount in an investor's bank account.

In ASBA, the funds are not debited from your bank account until you receive an allotment of shares. The full name, "Application Supported by Blocked Amount," clearly indicates that ASBA works on this mechanism of blocked funds. This means the funds remain held in your bank account, and you continue to earn interest on the blocked amount until it is either debited or released.

Note: This process does not block your entire bank account. Only the specific amount approved for the IPO application will be blocked. Any other money in your account remains accessible for other purposes.

Question 25

How is ASBA utilized for IPOs?

Accepted Answer

ASBA is a facility used by Self-Certified Syndicate Banks (SCSBs) to block the required amount from an investor's bank account when they apply for an IPO.

All an investor needs is a bank account with one of the SCSBs that offers the ASBA facility. The ASBA application gives authorization to the SCSB to block the IPO application amount in the investor's bank account. This amount will only be debited if the investor receives an allotment in the IPO. The exact amount debited will also depend on the size of the allotment received.

Investors can apply for IPOs online or offline through ASBA.

Question 26

What are the steps to invest in an IPO using ASBA?

Accepted Answer

You can invest in an IPO through ASBA by either using your ASBA-enabled bank's Netbanking services or by submitting the IPO form at the nearest Self-Certified Syndicate Bank (SCSB) branch.

### Steps to invest in an IPO online through ASBA

• Log in to your Netbanking account.

• Navigate to the "IPO Application" tab or section.

• Select the IPO you wish to invest in from the list of upcoming or open IPOs.

• Fill in the form details, including your applicant name, bid details, issue price, Demat account number, and PAN number, among other required information.

• Click on "Apply" or "Submit."

### Steps to invest in an IPO through ASBA using the offline mode

• Download the ASBA form from the exchange website (e.g., NSE or BSE) or obtain a physical copy from your nearest bank branch.

• Fill in all the required details manually on the form.

• Submit the completed form to a Self-Certified Syndicate Bank.

Question 27

Can you explain the ASBA process?

Accepted Answer

ASBA stands for "Application Supported by Blocked Amount." It is a facility offered by Self-Certified Syndicate Banks (SCSBs) that allows them to block the application money in an investor's bank account specifically for subscribing to an issue.

The amount blocked for an IPO application cannot be used for any other purpose. However, the funds will continue to earn interest (if held in an interest-bearing account) until they are debited in the event of an allotment. If no allotment takes place, the blocked amount is released and becomes available in your account again.

To apply for shares using ASBA, you must have an account with one of the banks that offers the ASBA facility.

Question 28

Which is better for IPO applications: ASBA or UPI?

Accepted Answer

Both ASBA and UPI were introduced by SEBI with the goal of making the IPO application process simpler, more efficient, convenient, and time-saving for investors.

The introduction of ASBA eliminated the need for cheques and demand drafts for IPO applications. The subsequent introduction of the UPI IPO application is another step towards digitizing the process and reducing reliance on offline methods.

### Benefits of using ASBA

• Does not require a smartphone or UPI ID.

• Open for all investor categories (except Anchor Investors).

• IPO applications for minors are possible.

### Benefits of using UPI

• Convenient to use through mobile apps.

• You can apply through brokers, provided the broker offers the UPI IPO facility.

• Pre-IPO applications may be possible if your broker offers such services.

Question 29

Am I able to apply for an IPO using ASBA?

Accepted Answer

Yes, investors are able to apply for an IPO through the ASBA facility.

ASBA is mandatory for all investors applying for an IPO. You can apply through ASBA using either your UPI ID or your Netbanking account. Both payment methods will only block the application amount from your account, rather than debiting it immediately.

Question 30

How do I register for ASBA?

Accepted Answer

There isn't a separate "registration" process specifically for ASBA itself. Instead, to use ASBA, you need to have a bank account with any of the Self-Certified Syndicate Banks (SCSBs) that are registered with SEBI and approved to provide ASBA services.

For online ASBA IPO applications, you also need to have access to your bank's Netbanking services.

You can then apply online or offline using your ASBA-enabled bank account information, and the IPO application amount will be blocked.

The steps often referred to as "registering for ASBA" are essentially the steps for applying for an IPO using the ASBA facility:

• Download the ASBA form from the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) websites, or get one from your bank.

• Fill in all the required details on the form.

• Submit the completed form to a Self-Certified Syndicate Bank.

• The bank will then verify your details and send your bids to the exchanges.

• Finally, the application amount will be blocked in your bank account.

Question 31

Do I have to submit my ASBA application physically?

Accepted Answer

No, you are not required to submit your ASBA application physically. You have two options: you can either complete a physical ASBA form, available from an SCSB, and submit it to that SCSB, or you can submit your application electronically through your ASBA-enabled bank's Netbanking services.

Question 32

What is the UPI ASBA application process?

Accepted Answer

The UPI ASBA application process involves subscribing to an IPO using the UPI payment gateway.

### Steps to apply for an IPO using ASBA through UPI

• Log into your mobile banking app or your broker's trading platform.

• Navigate to the IPO section.

• Select the specific IPO you wish to apply for.

• Enter your bid details (e.g., quantity and price).

• Input your UPI ID.

• Submit your application.

• You will then receive a UPI authentication request on your UPI app; accept this request and complete the payment.

Question 33

What is the ASBA payment method?

Accepted Answer

The ASBA payment method is a facility introduced by SEBI that allows banks to block the specified amount for IPO applications once an ASBA application is received from an investor.

The amount will only be debited from your bank account if and when you receive an allotment of shares. During the application processing period, the blocked amount will continue to earn interest if it's held in an interest-bearing bank account.

If your bid is accepted and you receive an allotment, the bank will debit your account, and the allotted shares will be credited to your Demat account. If no allotment is made, the blocked amount will be unblocked and released back into your account.

ASBA	UPI
Requires an ASBA-supported bank account.	Requires a UPI ID.
Faster due to minimal data entry.	Quick but needs UPI ID and mandate approval.
No smartphone needed.	Smartphone required for UPI.
Offline forms submitted to SCSB.	Offline forms can go to brokers or registrars.
Bank blocks funds.	Funds blocked upon UPI mandate approval.
Minors can apply if they have net banking.	Minors can't apply as UPI ID isn't available.
All investors except anchor investors can use ASBA.	Individual investors can use UPI for amounts up to ₹5 lakhs.
Only banks offer ASBA.	Both banks and brokers offer UPI.
No pre-IPO applications.	Some brokers allow pre-IPO applications.

ASBA and IPO Applications

Understanding ASBA IPO

Features of ASBA

How to Apply for an ASBA IPO

1. ASBA IPO Online

Online Application Steps:

Note:

2. ASBA IPO Application Offline

Offline Application Steps:

ASBA Application Form Details

ASBA IPO e-Form

Download Links:

Costs Associated with ASBA

Timing for ASBA IPO Applications

ASBA Application Limits

Rules for ASBA IPO Applications

Third-Party ASBA Applications

Comparing ASBA and UPI

Frequently Asked Questions