You can subscribe to it as this is the first time the company is selling shares to the general public. The procedure for submitting an IPO application has changed significantly. This means in a matter of minutes; you can apply offline or online for an IPO. So, let’s learn how to apply for IPO application form through ASBA.
What is ASBA?
Application Supported by Blocked Amount is referred to as ASBA. SEBI created this application to make IPO investing easier. ASBA can block the application amount. Furthermore, the prohibited money cannot be used for any other reason. Moreover, interest will still be paid to you on the blocked amount. You must apply through ASBA if an individual is a non-retail investor seeking to participate in an IPO.
The money is only taken out of your bank account when a trader applies for an IPO via ASBA if your application is chosen for allocation. If, on the other hand, you decide not to receive the IPO problem or you decide to clear the issue, you will get your money back in your bank account.
How to Apply for IPO Through ASBA?
You have the option to apply for an IPO application through ASBA in two ways: offline and online. So, let’s discuss the online method of applying.
Online
- First, go to the website of your particular bank and sign into your online banking account.
- Look for the sections labeled "IPO Application" or "Demat Services."
- From the list of varied open issues, choose the name of the new initial public offering (IPO) by clicking on it.
- Make your bid by entering the lot size, demat account information, and bid cost.
- Give your approval to the bank's mandate request so that the money can be blocked.
- An IPO application ID is created once the application is approved. Furthermore, the bidding money is blocked by the bank until the allocation procedure. The capital is released from blockage and appears in the bank account if you do not receive the allotment.
Offline
- IPO applicant must submit an offline application for an IPO by completing the ASBA application.
- The Bombay Stock Exchange (BSE) or National Stock Exchange (NSE) websites offer the ASBA IPO application form download.
- Once the IPO form download or BSE IPO form download, complete it with the necessary information and turn it in to the stockbroker or the closest bank branch.
- Include a check for the required amount with the form as well.
- Your application is uploaded to the concerned bidding platform by the bank once your form has been submitted. Make sure that all of the information on the IPO applicant details form is accurate; if not, your application form will be denied.
- Ultimately, following a successful form submission, the appropriate capital will be temporarily blocked in the bank account pending the allocation procedure.Know more about IPO Allotment Status
Eligibility to Apply for IPO Through ASBA
- You have to be a citizen of India.
- Possess a PAN card that is active.
- An online trading account and a demat account are required.
- There must be sufficient balance in the bank account.
- A maximum of three offers may be made; however, if you bid at the cut-off price, you must indicate the quantity. Additionally, the maximum bid that a retail investor may place is INR 2 lakhs.
- You are not eligible to apply in the reserved category.
- After submitting the bid, it cannot be changed.
- You are required to obtain the insurance through a Self-Certified Syndicate Bank with which you maintain a banking relationship.
Important Points to Keep in Mind
- Before submitting an application for an IPO, make sure you have read the prospectus thoroughly and are aware of all the terms and circumstances.
- You can apply for an Investor Protection Fund (IPO) through ASBA only if your bank is a participant in the IPO registration and dematerialization process of the National Stock Exchange (NSE). You can find the page on the NSE website.
- Retail investors, high-net-worth individuals (HNIs), non-institutional bids, and qualified institutional buyers (QIBs) can all use the ASBA facility.
- Upon share allocation, the money blocked by ASBA will be released. This means the blocked cash will be released and available in your bank account in a few days if you are not allotted any shares.
- The closing date of the IPO should be noted, as applications cannot be accepted after that time.
- You only have one application for an IPO through ASBA, so be sure to enter all the information correctly.
The Bottom Line
One easy and effective approach to get into the stock market is to invest in initial public offerings (IPOs) through ASBA. You can effectively file for an IPO through ASBA and possibly get returns on your investment by following the easy instructions provided in this blog post. But keep in mind that there are risks associated with participating in initial public offerings.
