ASBA stands for "Applications Supported by Blocked Amount." It is a process developed by SEBI. This facility is used by investors while applying to any IPO.
Through ASBA, a retail investor blocks the relevant amount in their savings account till the shares are allotted. If shares are allotted to an investor, then the amount is deducted from the investor’s bank account; otherwise, it is unblocked after the allotment process is over.
Rules for applying for an IPO through ASBA
- This facility is only available to Indian investors.
- An account with a bank that accepts ASBA application forms must be held by the investor.
- For securities and shares, applications should be up to Rs 2 lakhs.
- The investor cannot bid in any reserved category.
- The investor cannot modify his bid.
