What is the meaning of ASBA?


The meaning of Application Supported by Blocked Amount (ASBA), is the mechanism for subscribing to applications in Initial Public Offerings (IPOs), where the applicant's money for the subscribed issue of IPO remains in his account till the shares are actually allotted to him.

The meaning of Application Supported by Blocked Amount (ASBA), is the mechanism for subscribing to applications in Initial Public Offerings (IPOs), where the applicant's money for the subscribed issue of IPO remains in his account till the shares are actually allotted to him. ASBA was introduced by Securities & Exchange Board of India (SEBI) for retail investors in 2008 which has since been extended to High Networth Individuals (HNIs) and Corporate Investors from January 1, 2010.

Under the ASBA Scheme the applicant has to authorize his banker to block his bank account with the required application money for subscribing to IPO. The account holder's account is debited with the exact amount once the allotment has been finalized. Under ASBA, the investor continues to earn interest on his bank account, and there are no delays associated with refunds.

Coal India Ltd - ASBA


According to data available on National Stock Exchange) (NSE), the money invested by Foreign Institutional Investors (FIIs) for the IPO is Rs 110000 crores and almost 75% of the issue was subscribed through ASBA. As it has become mandatory for QIBs to invest 100 per cent up front for public issues, many of them use the ASBA mechanism.

In the case of rights issue, under the ASBA scheme, application money is debited after the receipt of instructions from the Registrars. The retail portion of Coal India Ltd was subscribed to 2.23 times.


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