Initial Public Offer (IPO) is the time when a company for the first time applies for listing its shares on the stock exchanges. Anyone who has a demat account can apply for the shares in the IPO. In earlier days a physical application form along with a cheque was required to be filled. There was a problem that the amount used to get deducted from the bank account and if the shares were not allotted, it used to take a lot of time to get the money refunded, as long as 15 days in certain cases. In 2010, ASBA was introduced (Application Supported by Blocking Amount) which solved this problem. ASBA has been a game changer in the online IPO application process. In ASBA, there was no transfer of funds and only the amount for the subscription used to get block. If the shares were not allotted to the applicant, the funds were released without any delay. Previously, ASBA was optional and it has been made mandatory for all IPOs from 1st January 2016.
This article explains the process of how to apply for IPO through ASBA?
With the Net Banking Option, even the physical form is also not required and an online IPO application can be done without any wet signature and completely online. Securities and Exchange Board of India (SEBI) has notified a list of banks through which online IPO can be applied which are known as SCSBs (Self Certified Syndicate Banks).
For applying for an online IPO an Investor has to follow the following steps:
- Login to your Net Banking account with an SCSB Bank
2. Go to the option of either “ASBA” or “Online IPO’ or “Investments” and select IPO
3. If you are applying for the 1st time you need to register by entering the details like PAN. You will also need to enter the 16 digit “Demat Account” number where the shares will be transferred if the allotment is successful.
You can get the demat account number from SAMCO Star. After Login, on top-right corner, click on the dropdown with the client’s name on it & select “My Profile” as shown below:
This shall open a new window, where you can check the “Demat account number” or “DP ID” or “DP Beneficiary ID”. It would be a 16 digit number, which would be combination of 8 digit DP ID (for SAMCO customers, this would be fixed at 12054200) and 8 digit DP Beneficiary ID which is unique for each client.
Please enter “SAMCO Securities Limited” for DP Name, and your own name in case of “Beneficiary ID”.
Alternatively, the DP ID can also be taken from the transaction cum holding statement sent via mail by SAMCO Securities Ltd.
Once you’ve located your DP and BO ID, enter the details in your banks ASBA registration form, click on submit and complete the registration.
4. After the registration is successful, one should click on “Current Issues” to check the ongoing IPO for application. Select the Investor Category as Individual, select the Demat Account and bank account number. Enter the required quantity and the price at which the application needs to be done. The total amount would be computed.
Click on Submit and after confirmation, your Online IPO application is complete.
Watch this videos to understand what is IPO and ASBA