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IPO application rules tweaked: In a bid to ensure that only genuine entities participate in IPO, the Securities and Exchange Board of India (Sebi) has tweaked the initial public offering (IPO)norms. The new guidelines will be applicable for public issues opening on or after September 1, 2022, the Securities and Exchange Board of India (Sebi) said in a circular.

Here are 5 things you need to know about IPO application new rules:

1) ASBA (Application Supported by Blocked Amount) applications in public issues will be processed only after the application money is blocked in the investor’s bank accounts. 

2) "Stock exchanges shall accept the ASBA applications in their electronic book building platform only with a mandatory confirmation on the application monies blocked," the regulator said.

3) This will be applicable for all categories of investors -- retail, qualified institutional buyers, non-institutional investors and other reserved categories and also for all modes through which the applications are processed.

4) All stakeholders involved in the process are advised to take necessary steps to ensure compliance with this circular. Merchant Bankers shall coordinate with all stakeholders in this regard.

5) This circular shall be applicable for public issues opening on or after September01, 2022

In December 2009, Sebi prescribed the facility of ASBA in public issues for all categories of investors except Qualified Institutional Buyers (QIBs). In May 2010, the regulator extended the facility to QIBs.

What is ASBA?

ASBA is an application by an investor containing an authorization to Self Certified Syndicate Bank (SCSB) to block the application money in the bank account, for subscribing to an issue. If an investor is applying through ASBA, his application money will be debited from the bank account only if his/her application is selected for allotment after the basis of allotment is finalized. 

Prominent IPO aspirants waiting for better times

Fab India, Aadhar Housing Finance, Go Airlines, PharmEasy, Oravel Stays (Oyo), Droom, Ebix, Gemini Edibles and Fats India, Five Star Business Finance, TVS Supply Chain Solutions, Macleods Pharmaceuticals, Navi Technologies, Joyalukkas India and KFIN Technologies are among prominent IPO aspirants waiting for better times. 

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