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Wednesday, April 27, 2011

Investing in IPO? Avail ASBA using Net Banking

The biggest fear an IPO/FPO investor ever had was getting application money locked in the IPO, many  a times when there was no  or partial allotment, getting refund cheques was often a herculean task. Just like IT refunds in India, IPO refunds too were a major concern.
Despite interest loss, mental peace too was jeopardized.
But now, just chill, as gone are the days when the aforesaid used to happen.
With introduction of ASBA (Application Supported by Blocked Amount) by SEBI, is the one of the greatest favours SEBI has done for investors.
ASBA ensures that no amount is debited unless shares are allotted.
When investor makes an application using ASBA, requisite amount is blocked in his account but not debited until and unless allotment is made.
In case of partial allotment only desired amount gets debited. The biggest advantage is that there is no loss of interest on the blocked amount.
Now investors don’t have to write cheques or make draft (paying, due bank commission).
Though ASBA facility is available with all SCSBs (Self certified Syndicate bank) but investor can avail this facility from the SCSB where he holds the account.
Physical ASBA procedure is not that simple, as one has to visit bank to fill the ASBA form for which bank issues the reference number that’s why ‘net banking IPO application’ option is the most sought-after.
Investor can make online IPO application using net banking, where he has to furnish few details like names of co-applicants, bid details, date of birth, DP ID and beneficiary account number etc, and all is done. Investor gets the IPO application number and the transaction number.
Though ASBA option could not become that popular due to brokers apathy, as they don’t get any commission on the IPO application made under ASBA option, but ASBA is the best and most efficient way to apply in the IPO/FPO.


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