After knowing the basic things about ASBA and SCSB, now it is right time to know more about ASBA.
Benefits of ASBA
The investor need not pay the application money by cheque . Instead the Investor submits ASBA which accompanies an authorization to block the Bank account to the extent of the application money. The application is simple one. The investor need not bother about refunds as banks will automatically transfer the balance money after required money from blocked amount transferred to IPO company after allotment is finalized. The investor continues to earn interest till transfer of amount to IPO Company after successful allotment. ASBA form can be submitted to bank physically or electronically if the bank provides the facility through internet. The ASBA application is different from traditional application. For rights issue, the applicant has to use part A of the composite application form. There is no need of any DP account with the SCSB (Bank) where ASBA application is made by applicant. The SCSB will give counterfoil as an acknowledgement at the time of submission of ASBA. Order number also will be given in case of need by applicant when the SCSB uploads the application details. In case of any complaints the investor can approach the bank, where the ASBA application form was submitted or the Registrars to the issue.
For withdrawal of application, the ASBA bank has to be approached where application has been submitted earlier and give a request letter for withdrawal request to the registrars before the finalization of allotment giving relevant details like ASBA Number, order number, if available, DP ID, Client ID and PAN etc based on which Registrar will remove the bid from the electronic bid file.
The registrar will cancel the bid and instruct SCSB to unlock the application money in the bank account after the finalization of basis of allotment. If applicant ASBA form is rejected by registrar though applicant has given correct details, he can lodge his complaint with Investor grievance cell in SEBI in Mumbai. Also applicants should note that they should either opt for ASBA or physical form of cheque in application. If any applicant applies in both, his applications may be rejected treating this as multiple application based on same PAN mentioned in both. Since most of the branches have Core banking facility, application can be given in any branch having this facility in the SCSB banks. Stock Exchange electronic bidding system will provide for generation of order number which can confirm the uploading of bids. These order number as well as application number, will help SCSB as well as the investors in tracking their application. As already mentioned, ASBA can be used for right issues also. However, in the case of Rights issues, this facility of confirmation from NSE/BSE/SEBI sites is not possible as uploading in stock exchange electronic web is not allowed for rights. Hence the application data is sent directly to the concerned registrars by SCSBs, who will confirm the receipt of application to SCSBs.
Happy investing in IPOs.
C. R. Venkata Ramani