What is the ASBA Payment method for IPO?

Short Answer

ASBA stands for Applications Supported by Blocked Amount, which is an alternative payment method to apply for an IPO. Let's go through some more details on it.

Detailed Answer

In the ASBA method, the bidding for an IPO gets blocked by the bank until the allotment is done but the amount remains in the investor's account itself. Here in this article, we are going to know about the ASBA Payment method for IPO along with its various benefits and uses. So, without any further delay, let us get it started.

What is the ASBA Payment method?

ASBA Payment method is an alternative payment method, which is available for retail individual investors. By using this payment method investors can apply for various IPOs or bid for the same.

Benefits of ASBA Payment method

Usually, in other forms of payment, the amount for the application or bid gets debited and then the application of the investor is placed. However, under the ASBA payment method, the amount is not entirely debited and only gets blocked until the successful allotment of the bid. Until the bid is allocated the amount actually stays in the investor's account itself.

ASBA Payment offers an alternative payment method to the retail individual investors, which can be beneficial especially to the investors not having any Demat account and want to bid for the IPOs.

ASBA payment method also makes it to the investors to apply for the IPOs directly through participatory banks knowns as SCSB's. The main motive here is to reduce the turnaround time for the IPO stock listing which also makes the refund process much more efficient.

Conclusion

So this is all about the ASBA payment method for IPO. ASBA is an excellent process that ultimately makes both the listing and refund process much faster and efficient and at the same time offers an alternative payment method to the investors.

Tagged With: asbaasba methodipoasba payment
Categories: IPO Basics
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Related FAQs

What are the basic requirements to apply in an IPO using the ASBA process?

ASBA or Application Supported by Blocked Amount is an alternative payment method to apply or bid for an IPO. However, it is currently available to only the Retail Individual Investors and you also need to fulfill certain requirements for the same.

How to apply IPO in Zerodha? Buy IPO Online

If you are a Zerodha customer, you can apply for IPO online through Zerodha Console (Zerodha Back-office). The process for applying an IPO process has been explained in detail above. Here are few other answers to important queries that you may want to learn.

I do not have a Demat account. Can I apply for an IPO?

Although there are ways such as ASBA facility of your bank that you can use to open an IPO without Demat Account. It is still advisable to have a Demat Account.

Where do I get an IPO application form?

An IPO application form can be procured from a syndicate office member of the IPO or a stockbroker. You can download and print the IPO forms.

Can I apply in an IPO through multiple applications on same name?

No, a person cannot apply for a single IPO more than ones. There are strict rules and regulations followed in this matter. However, his/her family members can apply for the IPO under their name provided they have a demat account and PAN number.

How to Check IPO allotment in Zerodha?

There are many ways to check the IPO allotment status but Zerodha doesn't provide this facility on their website. To check the allotment status you can visit the website of the registrar of the IPO, for example, Link Intime, Karvy. With the help of a PAN number, you can easily check the status.

Can I revise or cancel my IPO application?

There is a subscription period for every IPO. You can make the changes or cancel your IPO applciation within this period. Post this; there is nothing that can be done.

How many IPO applications can I submit through online net banking from one bank account?

There are about 5 IPO applications that can submit through online net banking from one bank account. However, the number can change immensely from one bank to another.

What is the life cycle of an IPO? Process

An IPO or Initial Public Offering is where for the first time an earlier unlisted company sells new or existing securities and offers them to the public in the primary market.

What information should I keep after I submit the IPO application form?

There are few documents such as a photocopy of the IPO applciation, cheque copy, and the reference number of applciation if submitted online.