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How to Apply for IPO through ASBA

How to Apply for IPO through ASBA

Initial public offering or IPO investment give the traders a golden opportunity to become a shareholder in a new company. With every new IPO launching, investors get excited about the application. So in this article, we will talk about how to apply for IPO through ASBA.

One of the most reliable and safest ways for the IPO application, ASBA stands for Application Supported by Blocked Amount. It is a mechanism or a method that ensures that the amount in the trader’s amount is not debited till the time the shares are not allotted to him/her.

It is therefore very popular. You can apply through ASBA using the online method as well as the offline method.

Before diving into the procedure to apply for IPO through ASBA, let us have a look at who is eligible to apply for IPO through ASBA.

  • A retail investor who is a resident of India.
  • The investor should mandatorily have a demat account. If you don’t have a demat account, you can open one easily with Choice.
  • A bank account approved with ASBA bank list.
  • PAN card.

If you fulfil all these criteria, then have a look at how to apply for an IPO using ASBA.

How to Use ASBA for IPO Applying?

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

Everything is digitalized these days and so is it IPO application process. The offline process can be a little cumbersome and to sort this out, an investor is also given the chance to apply for the IPO online. If you are doing the same then you need to follow the given steps.

  • Log in to your net banking portal or the trading platform of your stockbroker. Jiffy makes the IPO application process really smooth and easy to carry.
  • Click on the IPO application 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 quantity, price and enter the mode of payment.
  • You can effectively apply for an IPO using UPI. Enter your UPI ID and click on ‘Apply Now.’
  • 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 traders get the IPO allotment, then the specific amount will be deducted from the bank account.

In the case, where the IPO is not allotted to a trader, the amount is unblocked and will reflect in your bank account.

ASBA e-Form

You can also apply for an IPO through an offline process, just in case you are facing troubles in applying online.

If you are applying for an IPO offline, then you can follow the given steps and carry it out effectively.

The first thing that you need to do is register yourself on the NSE website. To do the same, follow the given steps,

  • Visit the IPO section on the NSE website and click on new user registration.
  • After this, you will see a window wherein you will be required to fill the basic details. Your PAN number will be your user ID and the default password will be the first five letters of your first name.
  • You can now log in using these credentials.
  • You can download the IPO application form, fill in the details and submit it to your nearest branch of a stockbroker.
  • You can also visit the nearest bank branch (one eligible for ASBA application) and complete the form there.
  • You have to submit a cheque of the desired amount along with the form.

On successful completion of your application, the desired amount will be blocked in your account and will remain so till the allotment process is not completed.

Note- You only have to register once, and the IPO ASBA e-form will be available to download 2 days prior to the opening of the application.

In both cases, it is important to consider the IPO apply time to avoid any confusion or delay in filling the application.

Is ASBA Mandatory for IPO?

As discussed above, that ASBA is one of the seamless and secure ways to apply for the IPO application.

It does not involve any additional cost and further makes it easier for the investors to bid without worrying about any fraud or deduction.

Further, the regulatory body of the share market, SEBI has made it compulsory for all to apply for the book-build IPO through the ASBA process from June 2008.

Still wondering that why to apply for IPO through the ASBA method, then here are a few benefits for the same.

Benefits of Applying IPO Through ASBA

But, what are the benefits of applying for IPO through ASBA? Well, if you are looking to learn about How to Apply for IPO through ASBA, you should ideally know the benefits. Here they are:

  • The amount remains blocked and is only debited when the shares are allotted to you. Therefore, there is no risk of losing money.
  • If you are applying through ASBA, then you don’t have to wait for the cheques just in case you don’t get the allotment. The amount will be unblocked and will soon reflect in your bank account.
  • You can easily apply through UPI or net banking.
  • There is no necessity for any additional document.
  • Safe and convenient.

Conclusion

Application Supported by Blocked Amount or ASBA is a common and safe way to apply for an IPO. Sometimes, just due to this very reason, people get their confusions cleared on Is IPO safe or not type of concerns.

You just have to open a demat account and the rest of the process is easy. The amount is blocked and not debited till the time of the allotment. On top of that, you receive the interest on the blocked amount as well.

A lot of beginners also get confused on that point whether you can apply IPO without Demat account.

And it is okay to have such queries for we are here to solve those for you. Here are some of the frequently asked questions about IPO ASBA process in the next section.

Frequently Asked Questions

  • Can I Apply for an IPO without ASBA?

No, you cannot apply for IPO without ASBA. This is to ensure that an individual has the amount that he is applying for an IPO.

  • What is an ASBA IPO Application?

Application Supported by Blocked Amount is a process in which the application amount of an IPO is blocked in the investor’s account till the time the shares are not allotted. If the shares are allotted, the amount gets debited and if not, it is unblocked.

  • Is ASBA mandatory for IPO applications?

Yes, ASBA is mandatory for IPO applications as it makes sure that the investor has the application money in his/her account.

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