IPO Terminology
ASBA (Application Supported by Blocked Amount)
ASBA (Application Supported by Blocked Amount) is a system mandatory for applying for IPOs in India. Under ASBA, the application money remains in the investor's bank account but is blocked (held) until the allotment process is completed. If allotted, the money is debited; if not, the block is released.
Why it matters
ASBA eliminates the need for refunds, as your money never leaves your bank account until allotment is confirmed.
Common Questions about ASBA (Application Supported by Blocked Amount)
Can I apply for an IPO without ASBA?
No, SEBI has made ASBA mandatory for all retail and institutional investors applying for public issues in India.