How To Apply For IPO Using ASBA?



The Securities & Exchange Board of India (SEBI) has made it compulsory for retail investors to apply for IPO using ASBA (Applications Supported by Blocked Amount). ASBA is a facility under which the amount remains blocked as "lien amount" in the investor's savings account until the shares in IPO is allocated to him. In case the shares are not allotted to the investor, then the lien will be removed and the amount becomes open for use.
ASBA was launched on May 1, 2010 and one of the main benefit it offers is that there in case no share is allotted or less number of shares are alloted, there won't be any delay in refund of the application amount. Amount is debited from the account only in case a confirmed allotment. 
Suppose, you apply for 70 shares of Mahangar Gas @ Rs 400. In this case your bank will block a sum of Rs 28,000 i.e Rs 400 X 70 in your savings account. You won't be able to use this amount then. In case, allotment happens, the money would be debited from your account and you will get credit of shares in your demat. In case there of over-subscription and let's say you are allotted 35 shares only. Then, Rs. 14,000 will be debited from your account and rest will be available for use. If no allotment is made then entire amount of Rs. 28,000 will be unblocked and made available in your use.

Applying for IPO through ASBA online

All Major Banks offer their customers online facility to apply for IPO through ASBA. Simply login to your internet banking account with username & passowrd and search for ASBA. Please note it is not necessary for you to have demat account with your bank for applying IPO through ASBA. Customer having Demat account with other entities can also apply through the SBI- ASBA facility.
SBI users can click on e-services after login, select Demat & ASBA Services from the left and IPO(equity) as shown in the screenshot below
Once you follow on-screen instructions you will be directed to fill a simple form with details like PAN number, Demat account number, bid details etc. Just fill them up and click Submit. You will be  then redirected to acknowledgement page with all details.
You can apply to IPO’s via ASBA even if you don’t have Internet Banking facility. Just visit your branch and fill a paper ASBA form and submit it there. You can also visit IPO section of NSE or BSE site and apply online there. 
Hope this post helped you in clearing your doubts regarding applying IPO through ASBA. Although we have covered SBI in this post but the procedure in other banks will be more or less the same. We will try to cover other banks too in our upcoming posts..

So till then keep visiting this blog and don’t forget to subscribe to receive our informative posts directly in your email for free. Queries, if any can be asked in the comments.



Happy Trading
The Multiplier
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6 comments

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June 22, 2016 at 9:04 PM delete

Very informative post Stock King ji... Especially when some amazing businesses are going public.. Keep guiding...

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June 23, 2016 at 10:32 AM delete

Sir,My son having account with Federal Bank and applied for Mahanagar Gas through ASBA with Federal Bank through ONLINE, even though he has Demat account with Motilal Oswal.Is it necessary for him to apply through physical form or apply through NSE/BSE? Somebody confuses us that it is necessary to fill the physical form also even though applied for ASBA through online.Kindly clarify.

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June 23, 2016 at 12:46 PM delete

Hello sundravadivel Ji,

If your son has applied via ASBA online there is no need for him to use physical forms or apply through bse/nse. These two modes are necessary only when internet banking facility is not available or in case the bank doesn't offers ASBA facility

Hope this clears your query.

Thanks

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June 25, 2016 at 5:47 PM delete

Sir,What i understood from your reply is that if a bank offers ASBA facility, then there is no need to handle physical forms and need not apply thro' NSE/BSE.Am I right?

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June 26, 2016 at 11:53 PM delete

yupp u hv got it right. Cheers !

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Anonymous
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April 16, 2017 at 2:24 PM delete

Can I apply using two bank for more chance of allocation? Also could I apply from others account for me?

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