What is ASBA?

ASBA full form is “Application Supported by Blocked Amount.”

It is an application facility provided by the bank, so automatically, you should have a bank account to enjoy this facility.

In the facility, whenever you will apply for an IPO, you can apply through your bank. It means that your expense for the amount to be paid for applying for the IPO will be paid by the bank only, and this will be transacted only when you get the final allotment of shares.

Your amount will be blocked in your account and will not be credited anymore until the shares you had applied do not get allotted to you.

The bank in which you have your account takes care of this account.

For this facility, you have to fill a form, called an ASBA form and submit it to your bank. This would ensure that you are applying for the IPO via ASBA application.

How to Apply IPO through ASBA? What is the procedure of applying in IPO through ASBA?

I am delighted to share my knowledge on how to apply IPO through ASBA with you.

If you are seeking how I apply for an IPO through ASBA (Application Supported by blocked amount) or how to invest in IPO online through ASBA facility then you are in right place.

Prior to the year 2016, it was a common problem in India’s base of investment whenever any IPO comes in the stock market. The new IPOs or the Initial Public Offers used to raise the money from the public by inviting interesting individuals to buy the shares of the company.

But the problem was that when the public applies for the shares, they were not allotted to them quickly, rather they are allotted to them by the company after a period of time and the investor had to pay the money for the shares upfront to them. The problem to this mechanism was that

  • The investor has to pay upfront for those applied shares which are not allotted to them yet.
  • The investors do not get the interest even forgiving and keeping their money to the company for the period of waiting time.
  • The refund of submitted money was not guaranteed.
  • IPO Investing Tips

The above-listed problems took a deep insight by the SEBI, and then a single solution to all the averse was generated. The name of the solution come s with the “ASBA”.

So, stay tuned for this post to know how to invest in IPO online through ASBA facility.

Banks availing the ASBA facility-

The banks which are approved by the SEBI, who are facilitating the application of ASBA includes-

  1. Allahabad Bank
  2. Andhra Bank
  3. Axis Bank
  4. Bank of Maharashtra
  5. Bank of Baroda
  6. Bank of India
  7. Canara Bank
  8. Central Bank of India
  9. Citi Bank
  10. Corporation Bank
  11. Deutsche Bank
  12. Federal Bank
  13. HDFC Bank
  14. HSBC Bank
  15. ICICI Bank Ltd
  16. IDBI Bank Limited
  17. Indian Bank
  18. IndusInd Bank
  19. Indian Overseas Bank
  20. JP Morgan Chase Bank, N.A.
  21. Karur Vysya Bank
  22. Kotak Mahindra Bank
  23. Nutan Nagrik Sahakari Bank Ltd.
  24. Oriental Bank of Commerce
  25. Punjab National Bank
  26. South Indian Bank
  27. Standard Chartered Bank
  28. State Bank of Travancore
  29. State Bank of Bikaner & Jaipur
  30. State Bank of India
  31. State Bank of Hyderabad
  32. Syndicate Bank
  33. UCO Bank
  34. Union Bank of India
  35. United Bank of India
  36. Vijaya Bank
  37. Yes Bank Limited

They all are Self-Certified Syndicate banks. It means that these banks are authorized to block the IPO application amount until IPO allocations are finalized. This way Issuer Companies are guaranteed that the money is blocked and not used for other purposes.