WEALTHY and corporate investors will soon be able to use the application supported by blocked amount or the ASBA facility — where a public issue applicant's money leaves his bank account only after the share allotment. In a circular on Thursday, market regulator Sebi said the system, which has been available only to retail investors since its introduction in May 2008, will also be accessible to these investor segments too, barring qualified institutional buyers or QIBs, starting January 1.
Sebi has abolished restrictions in the existing ASBA facility, which do not allow revised bids, accept more than one bid and accept application only at the cut off price in a public issue.
The move is part of Sebi's attempts to reduce the time between the closure of a public issue and its listing. In a recent interview to ET, Sebi chairman CB Bhave had indicated the possibility of reducing this period to seven days from 20 days, currently.
Brokers said this will be possible once the ASBA facility is extended to QIBs. The smooth implementation of this system will also pave the way to getting investors to deposit 100% margins at the time of applying for IPOs, Mr Bhave said.
Hundred per cent payment for institutions needs to be done. Two things have to be put in place before that. One, the ASBA facility should be available for institutional investors, and two, the time taken to list from the day of issue closure has to be reduced. Institutional amounts are huge, and if you keep them blocked for a considerable period of time, there will be issues.
