ASBA

Q. Explain the working of ASBA

 ASBA means application supported by blocked amount.

 It is an application containing an authorization to block the application money in the bank
account for subscribing to an issue through a lien.
 If an investor is applying through ASBA, his application must be debited from the bank
account only if his or her application is selected for allotment.
 It is mandatory for all public issues opening on or after January 1st 2016 to have ASBA

Procedure for ASBA

 The investor submits the ASBA form after filling the requisite details like name of applicant,
pan number, demat account number, bid quantity and other relevant details, to their
banking branch by giving an instruction to block the amount in their account.

Who can apply for ASBA?

 In case of Initial Public Offer, all investors can apply through ASBA.
 Under Rights Issue, all shareholders can apply for it.

Advantages of ASBA

 The investor continues to earn interest on the application money as the same remains in his
bank account.
 The investor does not have to worry about refunds.

Public Company

Minimum 7

Maximum unlimited

Free transferablitly of shares

Government Company

Minimum 51% of share capital held by the government ( central or state of both )

One Person Company

Only one person

MoA must contain a nominee

Private Company

Minimum 2 people

Maximum
Restricted transfer of shares

A government company can be private company or a public company.

Types of Shares

Particulars Note Amount

Authorized capital
10,000 shares @ 10 each 1,00,000
Issued Capital