Can one subscribe to all IPOs through ASBA?
No. You can avail of ASBA only to subscribe to book-built public issues and a select few rights issues.
How does one avail of this facility?
Only certain designated banks — Self-Certified Syndicate Banks (SCSB) — can offer this facility to the applicants. A list of these banks and their branches can be accessed from the websites of Sebi, BSE as well as NSE . The applicant can submit the ASBA application to the SCSB with whom he/she is maintaining the account to be blocked (to the extent of the application money) for the purpose. The application can be submitted either by filling up the form or online, by using the Internet banking facility.
Is it compulsory to submit bids through this system?
No. You can choose to opt for the existing process of applying through cheques. However, remember that you cannot avail of both the modes to send in your applications. If you apply through a cheque as well as ASBA, it will be rejected on grounds that it constitutes multiple application.
How does an investor stand to benefit from ASBA?
Despite not being mandatory, it makes sense to opt for ASBA as it scores over the traditional mode of cheque payment in several areas. It enhances the transparency of the share allotment process. Only that amount that is required to make share allotment is debited to the account after the bid is selected for allotment after the basis of allotment is finalised. Therefore, the applicant need not worry about the refund in case he/she is not allotted any share. Moreover, since the money remains in the bank account, he/she does not lose out on the interest that can be earned during the period.
Is an applicant allowed to withdraw ASBA bids?
Yes. During the bidding period, one can approach SCSB, to which he/she had submitted the application and make a withdrawal request, post which, the bank will unblock the amount. After the bid closure period, applicants need to send their withdrawal requests to the Registrars in order to withdraw their bids. Subsequently, the Registrar will ask the SCSB concerned to unblock the application money in the bank account after the finalization of basis of allotment.
