What is ASBA in IPO? Meaning, Features, Application Process Explained

Table of Contents

• What is ASBA IPO?
• Features of ASBA
• ASBA IPO Application Process
  • 1. ASBA IPO Online Application
  • 2. ASBA IPO Offline Application
• ASBA IPO Application Form
• ASBA Charges
• ASBA IPO Timing
• ASBA IPO Limit
• ASBA Rules for IPO
• ASBA vs UPI

What is ASBA IPO?

ASBA IPO , short for Application Supported by Blocked Amount, is a facility that revolutionized the IPO application process in India when it was introduced in 2008. It allows investors to block funds in their bank accounts when applying for IPOs, ensuring a seamless and secure experience.

Today, ASBA is widely used by all categories of investors, including retail investors, non-institutional investors (NIIs), and qualified institutional buyers (QIBs).

What is ASBA in IPO?

ASBA is a process through which investors apply for shares during an IPO by authorizing their banks (Self-Certified Syndicate Banks or SCSBs) to block the application money in their accounts.

The funds remain blocked until the IPO allotment is finalized. If shares are allotted, the money is debited accordingly. In case of non-allotment, the blocked amount is released, and investors continue to earn interest during the blocking period.

Features of ASBA

• Modes of Application: Investors can apply through online (net banking) or offline (physical form) modes.
• Funds Blocking: The application amount remains blocked in the bank account and is debited only upon successful allotment.
• Interest Benefit: Investors earn regular interest on the blocked funds.
• Lien Release: In case of non-allotment or partial allotment, the blocked amount is unblocked after allotment results.
• No Mandate Approval: Unlike UPI-based IPO applications, no separate mandate approval is needed.
• Safe and Convenient: Eliminates the need for cheques or demand drafts, making the process faster and more reliable.

ASBA IPO Application Process

Applying for an IPO through ASBA is simple and investor-friendly. You can apply either online or offline.

1. ASBA IPO Online Application

The online method is the most convenient way to apply for IPOs through ASBA.

Steps to Apply Online via ASBA:

1. Log in to your net banking account, which offers ASBA services.
2. Navigate to the IPO/Investments section.
3. Select the desired IPO.
4. Fill in the required details like Name, PAN Number, and Demat Account details.
5. Enter your bid details (quantity and price).
6. Submit your IPO application.

Note:

• Applicant details (Name, PAN, Demat) typically require one-time registration.
• Some banks may require an OTP verification before final submission.
• Always check with your bank for specific procedures.

2. ASBA IPO Offline Application

If you prefer the offline method, you can submit your application physically at an SCSB branch.

Steps for Offline Application:

1. Obtain the ASBA IPO Application Form from a broker or download it from the NSE/BSE website.
2. Fill in personal details, bank account number, and bid information.
3. Sign the form.
4. Please submit it to the nearest Self-Certified Syndicate Bank.
5. Collect and retain the acknowledgment receipt for future reference.

Note:

Resident individuals, QIBs, NIIs, and eligible NRIs (non-repatriation basis) use white forms.

FPIs (on a repatriation basis) use blue forms.

ASBA IPO Application Form

The ASBA application form can either be downloaded from the NSE/BSE websites or collected from brokers and banks.

• BSE ASBA IPO Form: Blank forms available for download.
• NSE ASBA IPO Form: Offers both blank and pre-filled forms (after user registration).

Benefits of NSE ASBA e-Forms:

• Save your personal and bank details with a one-time registration.
• Quickly generate pre-filled forms for future applications.
• Option to fill forms digitally before printing, even without registration.

ASBA Charges

There are no charges for applying through the ASBA facility. It is absolutely free for investors.

ASBA IPO Timing

• Start Time: 10 AM on the issue opening day.
• Cut-off Time: 5 PM on the issue closing day.
• (Some banks may close ASBA applications around 2-3 PM on the last day.)

Always check your bank’s specific cut-off timings.

ASBA IPO Limit

• A maximum of 3 bids per application is allowed.
• Only one application per bank account is permitted.
• QIBs and NIIs cannot:
• Withdraw bids once placed.
• Apply at the cut-off price.
• Cut-off times may vary based on the bank.

ASBA Rules for IPO

• Investors must have a bank account in an ASBA-supported bank.
• Net banking access is required for online ASBA applications.
• PAN and Demat Account are mandatory.
• Third-party ASBA applications are no longer permitted (since May 1, 2022).

ASBA and UPI

Both ASBA and UPI methods are available for IPO applications, but they have key differences:

ASBA vs UPI

Conclusion 
The ASBA facility has made IPO applications smoother, faster, and more secure for investors. Whether you prefer online or offline methods, ASBA ensures that your funds stay safe while providing you with a hassle-free investing experience.

For anyone looking to participate in IPOs, understanding and using ASBA is a smart and recommended approach.