The Security and Exchange Board of India, or SEBI, on Friday informed in a released statement that till August 29, 2008, five banks have got the status of Self Certified Syndicate Bank (SCSB) in a move to get nod of Application Supported Blocked Amount (ASBA), the new process of IPO for which SEBI had issued the draft guidelines on July 30, 2008.
SEBI has said that till Friday five banks: Corporation Bank, Union Bank of India, HDFC Bank, State Bank of India (SBI) and ICICI Bank have been standardised as SCSB standing banks, and now these banks can participate in new IPO Process that would be held through Applications Supported by Blocked Amount (ASBA) system.
According to SEBI, in the new IPO process, the SCSBs can accept the application/applications of IPO bidding of the bidders and can block the equivalent bidding amount of the bidder in his/her account following the ASAB system. It (SCSB) uploads the details in the electronic system of Bombay Stock Exchange (BSE) and National Stock Exchange (NSE).
After completing this process and verification of the application, the ASAB bidder would consider as successful bidder alike the traditional ones.
After declaration of IPO result, if the bidder succeeds to get the equity share, the frozen money would be transferred into bidding company’s account and if fails, the freeze money would immediately be released as per customers’ requests.
This new IPO process would likely to eradicate the process of refund by companies to the applicant in case of non-allotment of shares.
According to SEBI, the NSE has completed the mock electronic bidding process while BSE is about to complete. But, as per SEBI guidelines ASBA facility will be applicable only for book-built public issues, where one payment option mode will be allowed for the retail individual investors.
Gujarat based white minerals manufacturing firm ‘20 Microns’ has informed that SCSBs have contacted to company to kick off this process with their IPOs. If it becomes true, September 08, 2008 will add a chapter in the history of IPOs to initiate this innovative process.
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