How to Apply for IPO Through ASBA: Process & Benefits

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ASBA stands for Application Supported by Blocked Amount. When you submit an IPO application, instead of deducting funds, the application amount is blocked in your account and the money stays in your savings or current account until you are allotted the shares.

After allotment of shares, the required amount for those gets debited from your account and the remaining amount gets unblocked.

Eligibility for ASBA

Before understanding how to apply for an IPO through ASBA, let us have a look at who is eligible to apply for it.

Resident of India: The investor should reside in India.
Demat Account: The investor should mandatorily have a demat account. If you don’t have a demat account, you can open one easily with Choice.
Bank Account: The investor should apply to self-certified Syndicate Banks (SCSBs) that meet the conditions as prescribed by SEBI. The bank should also have sufficient funds needed to cover the bid.
PAN Card: The investor should have a valid PAN card issued by the Income Tax Department of India.

Documents for IPO Application Through ASBA

These are the documents that you require to apply for IPO application through ASBA:

PAN Card
Demat Account Number
Bank Account Number

If the investor has fulfilled all the above requirements, the next step is to understand how to apply through ASBA.

Apply for an IPO through ASBA

If you want to apply for an IPO, one of the reliable and convenient options you have is using ASBA. It can be done either online or offline.

Online Method

If you need to apply for an IPO online, you need to follow the given steps:

Log in to your net banking portal or the trading platform of your stockbroker. You can log in via the Choice FinX app to make the IPO application process more seamless.
Click on the IPO tab option.
An entire list of the available IPOs will open up with the details.
Click on the IPO that you wish to apply for.
An application window will open. Fill in the required details like lot, price, and enter the mode of payment.
If you are applying for UPI ASBA via a broker, enter your UPI ID and click on ‘Apply.’
Open your UPI application and check the section to approve the UPI mandate.
On complete verification, you will receive an amount block request on your UPI. Click on approve.

When the process is completed, the amount will be blocked in your account. If the investor gets the IPO allotment, then the specific amount will be deducted from the bank account.

If the IPO is not allotted to a trader, the amount will be unblocked and will reflect in your bank account.

Offline Method

If you want to follow the offline process, you need to do the following:

Download the form: Download the physical blank “ASBA form” from the official NSE/BSE website or get it from your stockbroker.
Fill in the details: Enter the details such as your PAN number, Demat account number and Bank account number. Carefully fill in the details such as bid quantity, bid price and category.
Submit the form: You can submit the form to a Self-Certified Syndicate Bank (SCSB) branch that is ASBA-enabled with the payment.
Block the funds: After you have signed and submitted the form, the bank will verify the details and block the application amount in your bank account that is linked wth your demat account.

Note- While you can download blank forms anytime from the official NSE/BSE website, you can only officially submit your application online or offline during the official bidding window (usually 3 to 4 days) when the IPO is open to the public.

Also read: How To Apply For Rights Issue Through ASBA

Benefits of Applying for IPO Through ASBA

If you are looking to learn about how to apply for an IPO through ASBA, you should ideally know the benefits. Here is a list of benefits that will show why it is convenient to apply for IPO through ASBA:

Safety of funds: The amount remains blocked in your account and is only debited when the shares are allotted to you. Therefore, there is no risk of losing money.
Interest earnings: Since your funds remain in your savings account, you continue to get interest on your blocked amount until shares are allotted and the required amount gets debited from your account.
No waiting for refund cheques: If you are applying through ASBA, then you don’t have to wait for the refund cheques, just in case you don’t get the allotment. The amount will be unblocked and will soon reflect in your bank account.
UPI and Net Banking: You can easily apply through UPI or net banking.
Flexibility to cancel or modify bid: If you are a retail investor and you want to cancel or modify your bid, you can still do it as long as the IPO is still open for subscription. However, the unblocking of funds process may not be that instant.

ASBA IPO Charges

Brokerage firms or banks do not charge any fees for applying for IPO through ASBA.

Important Points to Keep in Mind

Make sure that your PAN details match your bank account and demat account.
Maintain sufficient balance in your bank account. If your bank account balance is insufficient, your application will fail.
Only apply for an IPO through Self-Certified Syndicate Banks (SCSBs) as they are the only ones who can provide the ASBA facility.
Before applying, make sure you carefully review the company’s fundamentals, IPO valuation, and risk factors so you can make informed investment decisions

Conclusion

ASBA is one of the most convenient and safest ways for investors to apply for an IPO in the primary market. ASBA is designed to ensure that your money remains securely blocked in your bank account until the allotment process is completed, making the process more transparent and seamless. This not only removes the uncertainty and delays associated with refund cheques but also gives investors greater control over their funds.

Whether you are a first-time investor or someone who regularly invests in IPOs, ASBA makes the whole process simpler by allowing you to apply directly through your bank’s net banking portal or through your stockbroker.

A well-researched approach, combined with the convenience of ASBA, can help you participate in IPO opportunities with greater confidence and ease.

FAQs

Which Banks Provide ASBA Facility for IPOs?

All the major banks provide ASBA facility for IPOs, such as State Bank of India (SBI), Bank of Baroda, Punjab National Bank, Union Bank of India, HDFC Bank, ICICI Bank, Axis Bank, Kotak Mahindra Bank, IDBI Bank, Federal Bank, RBL Bank, Yes Bank, AU Small Finance Bank, DBS Bank, and Deutsche Bank, Bank of Maharashtra.

Is Money Deducted Immediately in ASBA?

No, money is not immediately deducted in ASBA. The required amount is simply blocked in your bank account while the bidding is in process. The money is only deducted after the shares have been allotted to you.

Can I Modify or Cancel an ASBA IPO Application?

Yes, you can modify or cancel an ASBA IPO application, but only while the IPO subscription window is open. Once the issue closes, you are not allowed to make any modifications or cancellations. Please remember that this rule varies for different investors.

Rules by Investor Category

Retail Individual Investors (RII): Allowed to freely modify or cancel their bids.
High Net Worth Individuals (HNI) / NIIs: Allowed to modify bids (usually only upward revisions in price or quantity), but cannot cancel the application completely.
Qualified Institutional Buyers (QIB): Cannot cancel their applications and face severe restrictions on modifications.

Is ASBA mandatory for applying to IPOs?

Yes, ASBA is mandatory for almost all investors applying for IPO in India except anchor investors. The Securities and Exchange Board of India (SEBI) mandated the use of ASBA for almost all investors to apply for IPO on January 1, 2016.

Can I submit more than one ASBA application for the same IPO?

No, you cannot submit more than one ASBA application for the same IPO under the same PAN. SEBI strictly enforces a "one application per PAN per IPO" rule. If you submit more than one application for the same IPO, even if the platforms are different, all applications will be rejected, as it is under the same PAN.