The market watchdog Sebi today extended the ASBA (application supported blocked amount) facility to corporate investors and high networth individuals (HNIs) to enable them to apply for IPOs or rights issue by keeping the application money in their bank accounts till allotment. Currently, this facility is available only to retail investors.

“…It has been decided to expand the reach of ASBA to other investor categories also like high networth individuals, corporate investors,” the regulator said in a release.

However, qualified institutional buyers (QIBs) will not be eligible to apply for public or rights issues using the ASBA facility. “The restrictions placed on investors under ASBA Phase-I viz that only retail investors can apply and that too only at cut-off, that there shall be not more than one bid, that bids cannot be revised etc will no longer be there under ASBA Phase II,” Sebi said.

This new facility would apply to all the issues opening from January 1.

Welcoming the move, SMC Capitals Equity Head Jagannadham Thunuguntla said, “It will help HNIs and corporates not to lose interest on their IPO application money during the period between the IPO completion date and listing.”

Sebi further said that since the introduction of the ASBA in 2008, it has been implemented in more than 20 issues and has benefited the investors, issuers and the market.

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