ASBA - the new investor friendly way to apply for IPOs

The objective of introducing ASBA is to ensure that the investor's funds leave his bank account
only upon allocation of shares in public issues. The ASBA process also ensures that only the
requisite amount of funds are debited to the investor's bank account on allotment of shares. In
this mechanism, the need for refunds is completely obviated.

Using this interface the banks, participating in the IPO process would be able to upload the bids
with respect to their customers, into the electronic book of BSE. The interface facilitates not only
the controlling branch but also the designated branches of the banks to directly upload the bids
into the electronic book at BSE.

The ASBA process shall be available in all public issues made through the book building route.

The main features of ASBA process are as follows:

a. Meaning of ASBA: ASBA is an application for subscribing to an issue, containing an

authorisation to block the application money in a bank account.
b. Self Certified Syndicate Bank (SCSB): SCSB is a bank which offers the facility of
applying through the ASBA process.

Our Bank, Bank of Baroda is committed to continuously enhance its offerings with
innovative services leveraging advanced technology to provide maximum banking convenience to
its customers.

Eligibility of Investors:-

From 01st January, 2010

 All category of investors other than QIBs are eligible to apply for public/rights issues using
ASBA facility with certain terms and conditions 

1. An application can have up to three bid options & it can be revised also. The lien will be
marked on the highest value of the three bids.

2. Bids at cut-off price allowed only if total application Amt is less than or equal to Rs. 1, 00,000
for investor category of Individual, Employee, Share holders,

3. One account can be blocked for maximum five applications in an IPO.

4. Revision and cancellation of bids for retail individual investors are permitted till the issue
closure date and time. However for investors other than Retail, the revision is not permitted on
the last day beyond 4 P.M.
 Such investors are referred as “ASBA investors”, at the time of submitting ASBA application
the investors should take utmost care to provide the correct-

 PAN
 DP ID
 Client ID
 Bid Quantity
 14 digits bank Account number

Please refer http://www.bankofbaroda.com/download/asba.pdf for more details

Frequently Asked Questions on Applications Supported by Blocked Amount (ASBA)

Facility

This sub section attempts to cover the basic concepts and questions related to Applications
Supported by Blocked Amount (ASBA) Facility. For full particulars of laws governing primary
markets including ASBA facility, please refer to the Acts/Regulations/Guidelines / circulars issued
to respective intermediaries appearing in the Legal Framework Section (www.sebi.gov.in).

FAQs on ASBA for Investors

1. What is “ASBA”?
ASBA means “Application Supported by Blocked Amount”. ASBA is an application containing an
authorization to block the application money in the bank account, for subscribing to an issue. If an
investor is applying through ASBA, his application money shall be debited from the bank account
only if his/her application is selected for allotment after the basis of allotment is finalized, or the
issue is withdrawn/failed.

2. Detailed procedure of applying in IPO through ASBA.

Under ASBA facility, investors can apply in any public/ rights issues by using their bank account.
Investor submits the ASBA form (available at the designated branches of the banks acting as
SCSB) after filling the details like name of the applicant, PAN number, demat account number,
bid quantity, bid price and other relevant details, to their banking branch by giving an instruction
to block the amount in their account. In turn, the bank will upload the details of the application in
the bidding platform. Investors shall ensure that the details that are filled in the ASBA form are
correct otherwise the form is liable to be rejected.

3. Who can apply through ASBA facility?

SEBI has been specifying the investors who can apply through ASBA. In public issues w.e.f. May
1, 2010 all the investors can apply through ASBA.
In rights issues, all shareholders of the company as on record date are permitted to use ASBA for
making applications provided he/she/it:
a. is holding shares in dematerialized form and has applied for entitlements or
additional shares in the issue in dematerialised form;
b. has not renounced its entitlements in full or in part;
c. is not a renouncee;
d. who is applying through blocking of funds in a bank account with the Self Certified Syndicate
Bank.

4. What advantage an investor has in applying through ASBA vis‐à‐vis applying through
an application with a cheque?
Applying through ASBA facility has the following advantages:
(i) The investor need not pay the application money by cheque rather the investor submits ASBA
which accompanies an authorization to block the bank account to the extent of the application
money.
(ii) The investor does not have to bother about refunds, as in ASBA only that much money to the
extent required for allotment of securities, is taken from the bank account only when his
application is selected for allotment after the basis of allotment is finalized.

(iii) The investor continues to earn interest on the application money as the same remains in the
bank account, which is not the case in other modes of payment.

(iv) The application form is simpler.

(v) The investor deals with the known intermediary i.e. its own bank.

5. Is it mandatory for investors eligible for ASBA, to apply through ASBA only?
No, it is not mandatory. An investor, who is eligible for ASBA, has the option of making
application through ASBA or through the existing facility of applying with cheque.

6. Can I make application through ASBA facility in all issues?

Yes, you can make application through ASBA facility in all the issues i.e. public and rights.

7. Where should I submit my Application Supported by Blocked Amount (ASBA)? How

shall I know which bank and which branch of that bank is the designated branch for
accepting ASBA applications?
List of Self Certified Syndicate Banks (SCSBs) and their designed branches i.e. branches where
ASBA application form can be submitted, is available on the websites of BSE
(www.bseindia.com) and NSE (www.nseindia.com) and on the website of SEBI
(www.sebi.gov.in). The list of SCSB would also be given in the ASBA application form.

8. What is Self certified Syndicate Bank (SCSB)?

SCSB is a bank which is recognized as a bank capable of providing ASBA services to its
customers. Names of such banks would appear in the list available on the website of SEBI. [Also
see answer to question (6)]

9. Can I submit ASBA in any of the banks specified in the list of SCSBs?
No, ASBA can be submitted to the SCSB with which the investor is holding the bank account.

10. How many applications can be made from a bank account?

Five (5) applications can be made from a bank account per issue.

11. Am I required to submit ASBA only physically?

No, you can either fill up the physical ASBA form available with SCSB and submit the same to the
SCSB or apply electronically/online through the internet banking facility (if provided by your
SCSB).
12. Can I use the existing application form for public issues for applying through ASBA?
Investor is requested to check the form carefully. In case of public issue, the application form for
ASBA will be different from the existing application form for public issues. The application forms
will be available with designated branches of SCSB. In case of rights issue, there will not be a
separate form for ASBA. The investor has to apply by selecting ASBA option in Part A of the
Composite Application Form.

13. Can I withdraw my ASBA bids? If yes, how?

Yes, you can withdraw ASBA bids. During the bidding period you can approach the same bank to
which you had submitted the ASBA and request for withdrawal through a duly signed letter citing
your application number, TRS number, if any. After the bid closure period, you may send your
withdrawal request to the Registrars before the finalization of basis of allotment, who will cancel
your bid and instruct SCSB to unblock the application money in the bank account after the
finalization of basis of allotment.

14. Who should I approach if I find that I had given all correct details in the ASBA form, but
application has been rejected stating wrong data?
You have to approach the concerned SCSB for any complaints regarding your ASBA
applications. SCSB is required to give reply within 15 days. In case, you are not satisfied, you
may write to SEBI thereafter at the following address

Investor Grievance Cell, Office of Investor Assistance and Education,

Securities and Exchange Board of India
Plot No.C4‐A,'G' Block, Bandra Kurla Complex,
Bandra(East),
Mumbai: 400051
Tel: +91‐22‐26449000 / 40459000
Fax: +91‐22‐26449016‐20 / 40459016‐20

15. Whether my bank account will be blocked or only the amount to the extent of
application money is blocked?
No. the entire bank account will not be blocked. Only the amount to the extent of application
money authorized in the ASBA will be blocked in the bank account. The balance money, if any, in
the account can still be used for other purposes.

16. If I withdraw my bid made through ASBA, will the bank account be unblocked
immediately?
If the withdrawal is made during the bidding period, the SCSB deletes the bid and unblocks the
application money in the bank account. If the withdrawal is made after the bid closure date, the
SCSB will unblock the application money only after getting appropriate instruction from the
Registrar, which is after the finalization of basis of allotment in the issue.

17. Do I necessarily need to have a DP account with the SCSB where I intend to submit the
ASBA application?
No. Investors need not necessarily have their DP account with the SCSB, where they are
submitting the ASBA form.

18. Can I submit my ASBA to a broker as is being done in the present issue process
applying through cheque?
You are required to submit ASBA to the SCSBs only.

19. Can I apply in an issue through ASBA facility and through “normal existing system of
payment through cheque” in an issue?
No. An investor can apply either through ASBA or through existing system of payment through
cheque. If an applicant applies through both, ASBA as well as non ASBA then both the
applications having the same PAN, will be treated as multiple application and hence will be
rejected.

20. Are the bids submitted through ASBA and uploaded in the electronic bidding system
of the stock exchange, in case of public issue through book building, reflect in the
demand graphs displayed in the website of stock exchanges?
Yes. The bids received through ASBA mode will also be reflected in the demand graphs
displayed in the website of stock exchanges.
21. Who is responsible for errors in the data uploaded in the electronic bidding system in
case of public issue?
In case there is an error in the data furnished in the application form submitted by investor, the
investor shall be responsible. In case there is an error by SCSB in entering the data in the
electronic bidding system of the stock exchanges, the SCSB shall be responsible.

22. Will I get the acknowledgement of receipt for applications submitted through ASBA
from the SCSB?
Yes. The SCSB shall give a counterfoil as an acknowledgement at the time of
submission of ASBA and also the order number, generated at the time of uploading the
application details, if sought by the investors in case of need.

23. Will there be any different treatment in allotment for ASBA and Non –ASBA forms?
No. ASBA forms will be treated similar to the non‐ASBA forms while finalizing the basis of
allotment.

24. What happens when the issue fails/is withdrawn?

In case the issue fails/withdrawn the SCSB shall unblock the application money from the bank
accounts upon receiving instructions from the Registrar.

25. In case of any complaints regarding ASBA application whom can I approach?
In case of any complaints the investor shall approach the bank, where the application form was
submitted or the Registrars to the issue.

26. In case a person is having bank account with a branch, for example, at Kolkata can he
submit IPO application through ASBA at a branch of the bank in Guwahati.
Yes, this can be done provided that your bank have core banking facility and the ASBA form is
submitted at a branch which is identified as designated branch by the bank.

27. Is there a better chance of allotment if one applies in IPO through ASBA?
The chance of getting allotment is same for all the applicants whether application is made through
ASBA or non‐ASBA. ASBA is a simple, easy and smart way of applying in public issues. There
are many advantages of applying through ASBA like money does not go out of investors’
account, no hassle of refund, investor keep earning interest on the blocked amount as banks
have started paying interest on daily basis w.e.f April 1, 2010 and it gives better opportunity for
utilization of money.

28. What if the SCSB is not the applicant’s banker?

ASBA forms can be submitted only at the SCSBs. In case investor does not have an account with
any of the SCSBs, then he can not make use of the ASBA.

Sources

Sebi website
BSE website
Bank of Baroda Website