What is the ASBA Payment method for IPO?
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- Updated On:07-Mar-2021
- Replies:1
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.
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Discussion (0)
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.
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.
Yes, you can apply for an IPO application under a minor or HUF's name, provided they have different PAN card numbers. Minors can open a Demat account with their parent’s PAN Card and bank account.
IPO's (Initial Public Offering) is very popular right now. Therefore getting an allotment is not easy. There are two different ways in which you can find out your allotment status. These are through the BSE India website and the company Registrar's website. Know the details and another bonus way of finding out allotment status here.
There is no provision for users to apply for an IPO through a current account. They would have to choose a savings account to get an IPO applciation processed further.
Yes, you can apply for an IPO application for your family and friends through your savings bank account details. However, keep in mind that only five applications can be filled with the same bank account details.
While applying for an IPO a person either uses the UPI or ASBA facility for the payment and in both the process the total amount of money remains blocked by the bank under a "Mandate" until the allotment process is finalized hence the amount remains in the bank account of the investor and only gets debited if he/she receives the allotment of the shares.
Adding money to Zerodha using UPI is the most commonly used method and is the most popular among the other methods. It is totally free and can be done with the help of any UPI application like Google Pay or BHIM UPI. This process can be done seamlessly with the help of Zerodha's web application as well as the mobile application- "KITE".
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.
Adding Funds to Zerodha online is an extremely straightforward process. There are two methods by which you can transfer money to your Zerodha account. They are UPI and Net banking. Adding funds using the UPI method is more convenient. Know the details.