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ASBA Process

ASBA Process

Anyone who is a fan of IPOs must be aware of the term ASBA. However many might confuse how this works or what ASBA Process is?

But first, it is wise to understand the concept of IPO and ASBA clearly.

And as you might already be aware of IPO, any company trying to list itself in the secondary market with the motive to raise funds either to expand or for any other corporate functions starts with the issuance of company’s private shares to retail investors or also called general public in the primary market.

IPO is just another low-risk method to earn good short term profits. And to do that one needs to first get the lot which happens partly by luck and partly by the right time and strategy to subscribe.

ASBA Meaning

ASBA abbreviated as Application Supported by the Blocked Amount, is the simple application process using which investors can apply for an IPO.

This method was developed by SEBI, to secure the investor’s money from any fraudulent or unnecessary discrepancies.

For easy understanding, we can say, ASBA is the process by which one can apply for IPOs during the subscription period with the hope to get the allotment so that they can earn handsome profits.

How to Apply for an IPO through ASBA

Firstly, one needs to have a demat account in order to apply for an IPO through ASBA, along with a valid UPI Id about which we’ll discuss further. The process includes the following steps:

  • Login to your demat account
  • Go to the IPO section, where you’ll find the list of past, active and upcoming IPOs
  • From the list of ongoing IPOs, select your favorite one and click on “APPLY”
  • IPO application will appear on a new page.
  • Enter the details such as quantity bid price and UPI Id.

After confirming the order, in order to complete the transaction, a UPI mandate text is sent to the investor on the registered mobile number.

But to do that, it is important to have BHIM UPI mobile app.

  • First, download the BHIM UPI app
  • Set up the application (language and personal details)
  • Link your active bank account and the mobile number associated with it.
  • Now you’re all set!

Once the UPI mandate request has been accepted, the application process is completed. Now all you have to do is wait and watch whether or not you get the allotment.

Now here is the catch! Once the application is submitted the concerned amount is frozen in the investor’s bank account, which gets debited only if the person gets the allotment, however, the amount gets unfrozen once the results are out, and unfortunately, the application does not get selected.

ASBA e-form

Now a lot of investors don’t trust the online processes and often look for offline processes. You can easily do this with the help of the ASBA e-form. All you have to do is go to the NSE website and download the form. But before that, you have to register yourself at the website.

It is a one-time process and you can easily use the same ID for applying for multiple IPOs.

Let us have a look at the registration process of the ASBA e-form.

  • Open the NSE IPO forms section and then click on the new user registration.
  • Now in the next window enter your basic details like your name, PAN card number, bank details, e-mail address, phone number, etc.
  • Click on save.

In these simple steps, you can easily register yourself on the NSE website.

After the successful registration, you can download the form for the specific IPO, fill in the details, and submit it with the required documents.

Once you have completed the form the desired amount will get blocked in your bank account and will be debited only when you get the IPO allotment. Know how does ipo allotment work before applying for any IPO to avoid any confusion.

For the successful application also it is important for an investor to consider the IPO apply time. This avoids any confusion and last-minute hassle for the beginner investor.

Conclusion

Now that we have come to the end of the article, it is always mandatory, to analyze what IPO should you invest in, which can be done based on certain parameters such as;

  • Capital available for investment
  • IPO details such as the issue price, fresh issue, and OFS
  • Although the almost minimal risk is involved in IPOs, it is always recommended to be careful, meaning one should always be cautious of their risk appetite.

Understanding an IPO based on these factors will help you as an investor in choosing the right IPO to invest in to make handsome profits.

If you want to start investing in the IPOs, open your demat account today!

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