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urgent reply plz...

CA Akshay Joshi (CA) (386 Points)

07 December 2009

what are " ASAB" option in IPO offer? and how they are helpful for investment purpose?

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MOHIT MAHAJAN (LCS, ACA) (2050 Points)
Replied 07 December 2009

I have heard about ASBA - “Application Supported by Blocked amount”.

If an investor is applying through ASBA, his application money shall be debited from the bank account only if his application is selected for allotment or the issue is withdrawn/failed.

In other words the amount equal to the application money will remain in your account and will not be send to the company untill allotment is made; although your account will remain blocked to the extent of amount required for bidding i.e. you can't use that amount. Your account will be debited only at the time of allotment.

This method is usefull to investor as money will reamin safe in his own account and in case of non-allotment or any other contingency he will not have to run here and there to get refund from the company as the amount will be immediately released. Thus this scheme is time & effort saving.