IPO made easier – ASBA, SCSB & IPO – PART II


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
(AICWA)

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2 thoughts on “IPO made easier – ASBA, SCSB & IPO – PART II

  1. In order to enhance the reach and acceptance of Application Supported by Blocked Amount (Asba), Sebi has said syndicate and sub-syndicate members can procure Asba forms from investors and submit the same to banks. “It has been decided that syndicate/sub-syndicate members may procure Asba forms from investors and submit it to self-certified syndicate banks,” said the Sebi circular.
    The syndicate/sub-syndicate members would also be entitled to commission for Asba forms procured by them in the same manner as non-Asba forms, it added. Meanwhile, banks will be entitled to per form processing fee for Asba forms. Merchant bankers have been directed to ensure that an appropriate disclosure is made in the offer document specifying the range of fee that banks will be entitled to for processing such forms procured by syndicate members/sub-syndicate members and submitted to them.

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