1. 1
Application Supported by
Blocked Amount (ASBA)
By:
Prof. Mallikarjun Bali
BLDEA’s VP Dr. P G H CET
Bijapur

2. 2
Facts and Figures
BSE NSE
Cash trading began in July, 1875 Nov., 1994
Derivatives trading
began in
June, 2000 June, 2000
Number of listed
companies
5054 2476
Cities present in 324 1486
Market capitalization
(Rs. In Cr.)
63.4 lakh 61.9 lakh

3. 3
How households shifted their
savings:
2000-05
Others, 1.2
Shares and
debentures, 2.8
Claims on
government ,
19.5
Currency , 8.9
Provident and
pension fund,
15.1
Life insurance,
14.7
Bank Deposits,
37.8
2005-11
Bank Deposits,
49.9
Life insurance,
19.9
Provident and
pension fund,
10.3
Currency , 10.7
Others, 1.4
Claims on
government , 3.5
Shares and
debentures, 4.3

4. 4
Introduction:
 ASBA (Applications Supported by Blocked Amount) is
an application containing an authorization to block the
application money in the bank account, for
subscribing to an issue. If an investor is applying
through ASBA, his application money shall be debited
from the bank account only if his/her application is
selected for allotment after the basis of allotment is
finalized, or the issue is withdrawn/failed.
 ASBA is an additional mode of payment introduced by
SEBI in July 2008 for easing up the process of
applying in the Public Offer and making the process
more efficient. For the purpose, SEBI has amended
the SEBI (Disclosure and Investor Protection)
Guidelines, 2000. This process is available in all public
issues made through the book building route. This
process Co-Exists with the Current process where the
cheques are used as a mode of payment.

5. 5
Key Features
 Easy to apply in IPO/FPO/Rights
Issue through Net Banking or
Physical formate
 Enjoys continued Returns on Blocked
Amount
 Option to revise/withdraw the bid

6. 6
Benefits of ASBA:
 No loss of interest, since the application amount is not debited to
the savings account on application.
 The amount for which no shares have been allotted is available
immediately on completion of allotment process. There is no need
to wait for the amount to be refunded by the company and be
credited to the account.
 Since the amount is available in the account, it is considered for
calculation of the Average Quarterly Balance (AQB).
 Multiple bidding facility is available to the Customer. In other
words Five applications can be made from a bank account per
issue.
 Customer can revise/withdraw the bid before/after the end of the
Issue in the prescribed format with the Bank.

7. 7
Who can avail ASBA facility?
Any investor who satisfies the below
conditions is eligible and can apply
for shares under ASBA mode:
 All Categories - Retail as well as Non-Retail
Investors
 Holds a savings/current account with the
Self Certified Syndicate Bank (SCSB)
 Has a valid PAN card.

8. 8
Process for Submitting Bid Through
ASBA Mechanism
 An ASBA investor, intending to subscribe to a book built public
issue, shall submit a completed ASBA form to a Self Certified
Syndicate Bank (SCSB), with whom the bank account is
maintained, through one of the following modes –
• Submit the form physically with the Designated Branches (DBs) of the
SCSB
(Physical ASBA) or
• Submit the form electronically through the internet banking facility
offered by the SCSB (Electronic ASBA).
 The SCSB shall give an acknowledgement specifying the
application number to the ASBA investor, as a proof of having
accepted his/her ASBA in a physical or electronic mode.
 If the bank account specified in the ASBA does not have sufficient
credit balance to meet the application money, the ASBA shall be
rejected by the SCSB.

9. 9
Process for Submitting Bid Through
ASBA Mechanism (Cont.)
 After accepting a Physical ASBA, the SCSB shall block funds
available in the bank account specified in the Physical
ASBA, to the extent of the application money specified in
the ASBA. The SCSB shall then capture/upload the
following details in the electronic bidding system provided
by the Stock Exchanges(s) for the particular public issue:
• Application number
• DP ID, Client ID
• Bid Quantity
• PAN
 In case of an Electronic ASBA, the ASBA investor
himself/herself shall fill in all the above mentioned details,
except the application number which shall be system
generated. The SCSB shall thereafter upload all the above
mentioned details in the electronic bidding system provided
by the Stock Exchange(s).

10. 10
Process for Submitting Bid Through
ASBA Mechanism (Cont.)
 The SCSB (Controlling Branch (CB) or DBs) shall generate a
Transaction Registration Slip/ Order number, confirming
upload of ASBA details in the electronic bidding system of
the Stock Exchange(s). The Transaction Registration
Slip/Order number shall be given to the ASBA investor as a
proof of uploading the details of ASBA, only on demand.
 In case an ASBA investor wants to withdraw his/her ASBA
during the bidding period, he/she shall submit his/her
withdrawal request to the SCSB, which shall do the
necessary, including deletion of details of the withdrawn
ASBA from the electronic bidding system of the Stock
Exchange(s) and unblocking of funds in the relevant bank
account.
 The Stock Exchange(s) shall make available the updated
electronic bid file to the Registrar to the Issue.

11. 11
Process for Submitting Bid Through
ASBA Mechanism (Cont.)
 The SCSB shall send the following aggregate information to the Registrar
to the Issue after closure of the biding period.
• Total number of ASBAs uploaded by the SCSB
• Total number of shares and total amount blocked against the uploaded ASBAs.
 The Registrar to the Issue shall inform each SCSB about errors, if any, in
the bid details, along with an advice to send the rectified data within the
time as specified by the Registrar.
 In case an investor wants to revise or withdraw his/her ASBA before the
bid closer date, he/she can submit bid revision or withdrawal request to
the DB
 In case an ASBA investor wants to withdraw his/her ASBA after the bid
closing date, he/she shall submit the withdrawal request to the Registrar
to the Issue. The Registrar shall delete the withdrawn bid from the bid file.
 The Registrar to the Issue shall finalize the basis of allotment and submit
it to the Designated authority for approval.

12. 12
Process for Submitting Bid Through
ASBA Mechanism (Cont.)
 Once the basis of allotment is approved by the
Designated authority, the Registrar to the Issue
shall provide the following details to the CB of
each SCSB, along with instructions to unblock the
relevant bank accounts and transfer within the
timelines specified in the ASBA process;
• Number of shares to be allotted against each valid ASBA
• Amount to be transferred from the relevant bank
account to the issuer’s account, for each valid ASBA
• The date by which the funds shall be transferred to the
issuer’s account
• Details of rejected ASBAs, if any, along with reasons for
rejection and details of withdrawn/unsuccessful ASBAs,
if any, to enable SCSBs to unblock the respective bank
accounts.

13. 13
Process for Submitting Bid Through
ASBA Mechanism (Cont.)
 SCSBs shall unblock the relevant bank accounts
for,
• Transfer of requisite money to the issuer’s account
against each valid ASBA
• Withdrawn/rejected/unsuccessful ASBAs
 The CB of each SCSB shall confirm the transfer of
requisite money against each successful ASBA to
the Registrar to the Issue.
 The Registrar to the Issue shall credit the shares
to the demat account of the successful ASBA
investors.

14. 14
Submission of ASBA Physically or Electronically to SCSB
Blocking the Application Amount by SCSB in Specified Account
Application Money to be Blocked until finalization of Allotment
Uploading the Application Data by SCSB in the Electronic
Bidding System
On Allotment, Unblocking the Relevant Bank Account and
Transfer of Requisite Amount Issuer’s Account
Process for Submitting Bid Through ASBA Mechanism

15. 15
Differences between Existing and New Method:
Particulars Existing Method New Method
Submission of Bid Through the investor’s brokerage
firm.
Through the SEBI registered
bankers.
Payment Method Through the cheque and to be
submitted along with
application.
It is not necessary to make
payment at the time of
submitting of bid. However,
the banker will simply
block the amount at the
time of uploading the
details in the bidding
platform.
Earning of Interest Here, the investor earns no
interest.
Here, the investor continues to
earn interest as the amount
is with the banker.
Refund Here, the company will have to
refund the amount to the
investor within the time limit
No question of refund.
Impact of Listing As company can not list its share
before entire process of issue
is completed including
refund, which delays the
listing.
As there is no question of
refunding, so it causes no
delay for listing.

16. 16
Suggestions for Popularizing ASBA
 At present, there are two separate forms printed
with separate colour codes – one for ASBA and
another for non-ASBA applicant.
Having two different forms may lead to a
situation where ASBA forms may not be available
in far-flung cities.
As such, it would be better to have a common
form with a check-box for ASBA.
 ASBA is available only with a few banks and that
too with a selected branches.
 ASBA continues to be poorly advertised, if it is
promoted well, both investor and banker will
realize that it is a win-win for all.

17. 17
Few Examples of Banks and
Branches Offering ASBA
Bank No. of
Branches
Branches
offering the
facility
ICICI 2539 101
AXIS 1281 160
HDFC 2000 102
SBI 10039 1060

18. 18
SEBI Reforms
 Recent reforms initiated by SEBI to boost retail
participation
1. Retail investor limit has been hiked to Rs. 2 lakh from
earlier limit of Rs. 1 lakh.
2. Now, retail investor can apply through an e-IPO. Under
this, the applicant have to approach a broker with an
application either in electronic or physical format. Brokers,
will then punch their application on the system. Brokers
will be remunerated by issuer companies for this mode.
3. To widen the shareholders base in public issues, SEBI plans
to ensure that every retail participants gets a minimum
bid lot irrespective of application size.

19. 19
SEBI Reforms (Cont.)
4. To help the issuing companies to raise capital, the average free
float market capitalization requirement for FPO and Right issue
has been reduced to Rs. 3,000 Cr. from Rs. 5,000 Cr.
5. The SEBI has allowed the use of Bonus and Right issues for
companies wishing to comply with minimum public shareholding
norms of 25% (the deadline for complying with this norm is
June 2013).
6. Non-Retail Investors have been barred from withdrawing or
lowering their bid size at any stage of public issues. However,
they may increase their bid size.
7. For IPO, issuers are now required to furnish the price band 5
working days prior to issue opening as against the earlier 2
working days.

20. 20