SEBI makes ASBA mandatory,IPOs to get simpler and quicker

Mumbai: In a bid to reduce the time period between the closure of an IPO to its listing from the current 12 days to six days, Sebi has decided to make ASBA mandatory in all IPOs from next year. ASBA refers to Application Supported by Blocked Amount, which provides an alternative mode of payment in public offers whereby the application money remains in the investor’s bank account till finalisation of basis of allotment happens. This helps in doing away with the entire refund process that normally takes a couple of days in the normal process.

“This will help in reducing the post issue timeline for listing from the existing T+12 days to T+6 days. Our atte-mpt will be to bring the number of days further down,” sa-id U.K. Sinha, chairman, Sebi. To enha-nce the points for submission of applications, Registrar and Share Transfer Agents (RTA) and depository participants (DP) have also been allowed to accept applications forms both physical as well as online and make bids on the stock exchange platform.    

“The new system of allowing any Sebi registered broker  to be a part of the IPO process is a welcome step and will help improve inve-stor participation,” said Krishna Kumar Karwa, managing director, Emkay Global Financial Services.“Considering the advantages of ASBA, it shall be mandatory for all investors to make ASBA applications,” Sebi said.