Rajesh Abraham

Mumbai

All public issues made through the book-building route will be eligible for the

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proposed applications supported by blocked amount process (ASBA) – a new plan which allows retail investors to apply for public issues wherein the money will be transferred to the issues from the bank account only if he or she gets share allotments.

Investors who want to avail this new mode of payment also have an option to withdraw their applications, the Securities and Exchange Board of India (Sebi) said, in detailed guidelines for the new IPO application system issued on Wednesday.

Sebi said the new guidelines are in its continuing endeavour to make the existing public issue process more efficient. The new system comes in the wake of complaints of major delays in refunds of application money in IPOs in some of the high profile public issues.

The new plan would co-exist with the current process, wherein cheque is used as a mode of payment, said banks that propose to offer this facility to investors viz., self-certified syndicate bank (SCSBs), should commence its activities with effect from 1st or 15th of a month, whichever is earlier, from the date of such inclusion on Sebi website. ASBAs can be accepted only by SCSBs, whose names appear in the list of SCSBs displayed in Sebi website.

All resident retail individual investors will be eligible for the new plan. Further, investors are required to bid at cut-off (the final price decided by the company on the initial public offerings), with single option as to the number of shares bid for.

Investors applying through the new plan cannot revise the bid and they should not be bidding under any of the reserved categories, said the Sebi circular.