ASBA in detail

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ASBA in detail

Applications Supported by Blocked Amount (ASBA) is an additional Payment Mode introduced by India's capital market regulator SEBI, with a view to make the existing public issue process more efficient. The ultimate aim is to reduce the time period between the Issue closure date and listing of shares. It also eliminates delay in receipt of refund of oversubscription amounts.
It is available in all public issues made through the Book Building route {both Initial Public Offerings (IPOs) & Further Public Offerings (FPOs)} as well as Rights Issues. It co-exists with the existing process, wherein cheque is used as a mode of payment.
It was initially introduced by SEBI w.e.f. 01st September 2008. At present, all categories of investors, including Qualified Institutional Buyers (QIBs) are eligible to apply through ASBA mode.
Only those Banks that has a valid registration with SEBI as a Bankers to an Issue and which has submitted a certificate to SEBI as per the given format will be treated as a Self Certified Syndicate Bank (SCSBs). Only SCSBs can extend ASBA facility to its customers. Union Bank of India is one of the few Banks to extend the said facility to its customers right from the first day the process came into existence.
ASBA means an application for subscribing to a public or rights issue, along with an authorization to the Bank (SCSB) to block the application money in a Bank account.
- An ASBA investor, who maintains a Savings or a Current account with any branch of the Bank, can submit a physical ASBA to the designated branches or electronically through internet banking facility, during the issue open period which is defined issue to issue.
- The Demat account of the applicant can be with any of the Depository Participant.
- In an ASBA, a maximum of three bids are permitted within the price band and in multiples of lot size specified by the issuer. The amount equivalent to the highest bid will be blocked.
- The Bank in turn, will block the application money in the Saving Bank or Current account specified in the ASBA application, on the basis of an authorization to this effect given by the account holder in the ASBA application form.
- Adequate clear balance should be available in the account that is proposed to be blocked.
- The bids can be revised (upward or downwards), withdrawn or cancelled during the issue open period.
- The application money will remain blocked in the bank account till finalization of the basis of allotment of the issue or till withdrawal of / failure of the issue or till withdrawal / rejection of the application, as the case may be.
- The Bank shall, within the issue open period, upload the application data in the electronic bidding system of the Stock Exchanges.
- In case of withdrawal / failure of the issue, the Bank on receipt of information from the Registrar to the Issue shall unblock the amount.
- Once the basis of allotment is finalized, the Registrar to the issue shall send an appropriate request to the Controlling Branch for unblocking the relevant bank account and for transferring the requisite amount to the issuer's account designated for this purpose.
- The allotted shares will be credited to the Demat account of the applicant specified in ASBA.

ASBA is a Simple, Safe and Smart way of applying in an eligible issue.

ASBA services are available at all our branches.

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ASBA IN DETAIL

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