How To Apply For Rights Issue Through ASBA

A rights issue lets existing shareholders buy more shares of a company at a discounted price - a chance to increase their stake without going through the open market. The simplest and safest way to apply is through ASBA (Application Supported by Blocked Amount), a SEBI-regulated facility that keeps your money in your account until shares are allotted.

This guide explains how to apply for rights issues through ASBA, covering both online and offline methods, and walks you through the entire ASBA process.

Online Process for How to Apply for Rights Issue Through ASBA:

Here’s a simple step-by-step ASBA process for rights issue through your bank’s internet banking platform:

1. Check Your Eligibility and Rights Entitlement -

Here’s how you can check if you are eligible to participate in the rights issue:

• The company announces a record date, which determines which shareholders can apply. If you hold the company’s shares in your Demat account on that date, you are eligible.
• You will receive a Rights Entitlement (RE) letter or electronic intimation specifying the number of rights shares you are entitled to.
• You can also verify your RE details on the registrar’s website or by checking your Demat account under the ISIN for the RE.

Understanding your eligibility ensures that you apply for the correct number of shares and avoid rejection due to ineligible holdings.

2. Log In to Your Net Banking Account (That Supports ASBA) -

• Access your online banking account with a SEBI-registered Self-Certified Syndicate Bank (SCSB).
• Most major banks like SBI, HDFC Bank, ICICI Bank, Axis Bank, and Kotak Mahindra Bank support ASBA rights issue application.
• You must apply through the same account that is linked to a Demat account. Using a different account may cause a mismatch, leading to rejection.

3. Navigate to the IPO/Rights Issues/ASBA Services Section -

Once logged in to your bank account:

• Go to the Investments, e-Services, or IPO/Rights Issue tab (the exact name may vary depending on your bank).
• Select “Apply for IPO/ASBA or Rights Issue” services. This section lists all active public issues, including IPOs, FPOs, and upcoming rights issues currently open for subscription.

4. Select the Rights Issue From the List -

• From the list of active issues, identify the company’s rights issue you want to apply for.
• Click on the issue name to open the application form.
• You can view important details such as the issue price per share, opening and closing dates, and your maximum entitlement quantity.

5. Enter the Required Details -

The next step is to fill in the ASBA e-form carefully. You will need to provide the following -

• DP ID and Client ID (16-Digit Demat Account Number)
• Number of shares you wish to apply for (within or exceeding your entitlement)
• Bid Amount, which is automatically calculated based on the issue price
• PAN and contact details (if required by the bank)

Double-check that your Demat account details match exactly with your records in the depository. Even a minor error may cause your application to be rejected by the registrar.

6. Confirm and Submit Your Application -

• Once you fill in all the required details, submit your application.
• Your bank will block the corresponding amount in your account rather than debiting it.
• The blocked amount will remain in your account but will not be available for withdrawal or use until the allotment process is completed.

7. Track Your Application Status and Allotment Updates -  

• After submission, you can monitor the ASBA application status through your bank’s portal under the “Application History” or “ASBA” section.
• Once the issue closes, allotment details will be published by the company’s registrar.
• You can check your allotment status on the registrar’s website using your PAN, DP ID, or application number.
• If the shares are allotted, the funds will be debited automatically, and the shares will be credited to your Demat account. If not allotted, the amount is automatically unblocked without any manual refund process.

Offline Process for How to Apply for Rights Issue Through ASBA:

If you prefer the offline method, you can apply for a rights issue through ASBA using the physical application form. Here’s the step-by-step process:

1. Download the Rights Application Form (CAF):

To begin, download the Rights Application Form, also known as the Composite Application Form (CAF). You can get it from:

• The company’s website
• The registrar’s website (for example, Bigshare or Link Intime)
• The stock exchange website (NSE or BSE)
• Your email, if you have registered your ID with the company or registrar

Make sure you use the correct form corresponding to the current or upcoming rights issue.

2. Fill Out the Form Carefully:

Next, fill in all the required details in the CAF accurately:

• Name, PAN, address, email ID, and phone number
• DP ID and Client ID (your Demat account details)
• Number of Rights Entitlements (REs) held and number of shares you wish to apply for
• Bank account number and IFSC code of your Self-Certified Syndicate Bank (SCSB)
• Signature as per your bank records

Double-check all the information to avoid mistakes that could lead to rejection.

3. Submit the Form to Your Bank (SCSB Branch):

Once the form is filled out and signed:

• Submit it at a designated SCSB branch that supports ASBA applications for rights issues.
• The bank will verify your details and block the application amount in your account instead of debiting it.

This blocked amount remains in your bank account until the allotment is finalised.

4. Track Your Application:

After submission:

• The bank will give you an acknowledgement slip as proof of your application.
• Your bank will then forward your ASBA application to the company’s registrar for processing.
• You can track your rights issue application status through your bank or registrar’s website until the allotment process is completed.

Conclusion

Applying for a rights issue through ASBA is not just convenient, it’s the most secure and transparent way to participate. Your funds remain in your account until allotment. Refunds are automatic, and the entire process can be tracked online. Whether you’re a first-time investor or a seasoned trader, using the ASBA process for rights issues ensures your application is safe, compliant, and hassle-free.

Stay updated with company announcements and use your bank’s ASBA facility for future rights issues to make investing safer, faster, and more convenient.

FAQs

1. What is ASBA in a Rights Issue?

ASBA (Application Supported by Blocked Amount) is a facility that allows investors to apply for IPOs and Rights Issues while keeping their funds in the bank account until shares are allotted.

2. How to Apply for The Rights Issue Through ASBA?

You can apply through your bank’s internet banking under the IPO/Rights Issue/ASBA section by selecting the issue, entering your details, and submitting the application.

3. Can I Apply For A Rights Issue Offline?

Yes, you can apply offline by submitting the Rights Issue application form to the registrar or designated bank branch, but online ASBA applications are faster and safer.

4. How do I Check My ASBA Application Status?

You can check your status through your bank’s ASBA dashboard or the registrar’s website by entering your application and DP details.

5. What Happens if Shares Are Not Allotted?

If shares are not allotted, the blocked funds are automatically released and made available in your bank account.