About Initial Public Offerings (IPO)
A corporate may raise capital in the primary market by way of an initial public offer, rights issue, or private placement. An Initial Public Offer (IPO) is the selling of securities to the public in the primary market. It is the largest source of funds with long or indefinite maturity for the company.
An Initial Public Offering is an opportunity for investors to take part in the growth of a company. It is always better to be in the first batch of investors. The shares offered by the company get listed on the stock exchanges and can be bought and sold by investors.
Now entire IPO application process is completely online, an investor can use the ASBA route in his online banking facility.
Main Features of ASBA process
ASBA provides an alternative mode of payment in issues whereby the application money remains in the investor’s account till finalization of basis of allotment in the issue.
ASBA process facilitates investors bidding with multiple options, to apply through Self Certified Syndicate Banks (SCSBs), in which the investors have bank accounts. SCSBs are those banks which satisfy the conditions laid by SEBI. SCSBs would accept the applications, verify the application, block the fund to the extent of bid payment amount, upload the details in the web based bidding system of NSE, unblock once basis of allotment is finalized and transfer the amount for allotted shares, to the issuer.