SEBI allows 16 banks to accept ASBAs for IPO, rights issues

The Securities and Exchange Board if India (SEBI) has allowed the State Bank of India, HDFC Bank, ICICI Bank and 13 other banks to accept application supported blocked amount (ASBAs) from corporate investors.

Besides these three banks, the other lenders include Punjab National Bank, Bank of Baroda, State Bank of Hyderabad, State Bank of Travancore, State Bank of Bikaner and Jaipur, Union Bank of India, Bank of Maharashtra, Corporation Bank, Deutsche Bank, IDBI Bank, Vijaya Bank, Yes Bank and Axis Bank.

The ASBA facility has been introduced to enable better participation by corporate investors and high networth individuals (HINs) in initial public offers (IPO) and rights issues by companies.

The ASBA facility will allow investors to apply for IPOs and rights issues of companies without physically parting with the application money.

The money will remain with the banks and will not be transferred to the companies until the shares are allotted to applicants in the IPOs or rights issue.

These banks have been authorised to accept application supported blocked amounts for all issues beginning 1 January, Sebi said in a release today.

More banks will be added to the list when requisite certificate is submitted by them, SEBI said.

Sebi had, in early December, extended the ASBA facility to corporate investors and high networth individuals, which was earlier available only to retail investors. Qualified institutional buyers (QIBs) are not yet eligible to apply for public or rights issues using the ASBA facility.