Investor Category in ASBA Facility of Bank – Applying IPO via ASBA
Investor Category in ASBA Facility
ASBA is one of the channels by which investors can apply for the bidding. It stands for “Application Supported by Blocked Amount”.
This option is offered by banks so that any individual holding such self-certified syndicate bank can apply for the issue without involving a brokerage firm.
In other words, you authorizing your bank to block your application money till the allotment of shares.
Once the allotment of the share happens bank only remits the money up to the allotted share to the promoters.
As the money lies in your bank account itself you continue to earn interest on the same.
Before we discuss the “Investor Category in ASBA“, let us briefly touch upon the “ASBA“.
Today’s New IPO Listing – How to Choose Best IPO for Investment?
Face Value in IPO – How to Calculate Face Value or Nominal or Par value?
Lot Size in IPO – How to Calculate Lot Size? | Can I Modify IPO Lot Size?
Book Built Issue IPO – Process | Steps | Types | Pros & Cons
Price Band in IPO – How is the Price Band of an IPO Decided?
Undersubscribed IPO – What Happens if the IPO is Undersubscribed?
Listing Gains in IPO | Highest Listing Gain IPO in India
When Can I Sell IPO Shares? Can I Buy & Sell an IPO in the Same Day?
IPO Applying Time – Cut Off Time for Online IPO Application
Types of Investors in IPO – What is the difference between RII, NII, QIB & Anchor Investors?
How Many Lots Can We Buy in IPO to increase the chances of an allotment?
In this paragraph, I’m going to discuss a few reasons why the ASBA facility is important.
- There will be no loss of interest as amount is not debited by your bank instead only blocked up to application amount.
- As soon as the allotment happens your banks only debit the amount upto the allotted shares.
Threfore as an investor you don’t have to wait for the refund to initiate.
- As the amount is only in the blocked state so in case customer changes his minds.
In other words, you want to revise or withdraw from bidding completely before the closure of IPO process.
- As a customer you can apply to multiple IPO from same account.
Also Read Applying IPO Online using SBI YONO Lite
Procedure of Applying IPO via ASBA
Under the ASBA facility, an account holder with self-certified syndicate banks can submit duly signed ASBA forms at the designated branches with required details like name of the applicant, PAN, Demat account number, bid quantity, bid price, and other relevant details of their bank branch.
Basis your request, the bank will upload your application details on the bidding platform.
Similarly, investors with active net banking account will have this option under the category of IPO.
- The menu shall display all the current IPO/FPO/NFO issues open for subscription.
- Subsciber to click at IPO issue which he/she intend to subscribe in the displayed list.
- Subscriber to select Investor name, account details. and investment category from dropdown.
- Subscriber to input bid quantity, price per share.
However, you can bid 3 price options. On clicking on calculate bid amount, the highest bid amount of the 3 options will be displayed.
This shall be the amount for which the lien will be marked in the selected account.
- Only RII i.e. retail individual investors (employee and shareholders also included) can bid at cut-off price.
- Subscriber to ensure that bid is in marketable lot and the bid amount is within minimum and maximum bid amount given in the price band of the issue.
- After that click on submit button.
- All IPO subscription for Individual category greater than INR 2,00,000, message will be displayed as HNI.
- Similarly, all IPO subscription for Individual category less than or equal to INR 20,00,00, message will be displayed as Retail.
Investor Category in ASBA
Any investors be it QII, NII, HNIs Retail or corporate investors/ promoter having a valid saving or current account and PAN can use the ASBA facility to apply for an IPO bidding.
The investor’s category remains unchanged whatever mode of application you use for share bidding.
Just to reiterate the category as below:
|RII||Retail Individual Investors could be individuals, NRIs’ or HUFs’ and are generally non-professional investors who apply for shares under book building process up to 2 Lac only.|
(employee and shareholders also included)
|QIB/QII||Qualified Institutional Investors are those investors who are registered with SEBI.|
As per SEBI, companies cannot allocate more than 50% shares to QIBs and also mandate a lock-in period of 90 days to ensure minimum volatility.
|HNI/NII||Individual Investors who invest for over 2lakh are categorized as High Net-worth Individuals.|
Similarly, if institutions apply for subscriptions over 2lakh then refer to them as Non-Institutional Investors.
|Mutual fund||Mutual fund companies.|
|Insurance companies||Insurance-based companies|
|Banks and FI||Bank and financial institution|
|Employee||Employees can apply as RII|
|Shareholders||Shareholders can apply as RII|