APPLICATIONS SUPPORTED BY BLOCKED AMOUNT (ASBA) FACILITY IN RIGHTS ISSUES

SEBI has introduced the facility of making applications through “Applications Supported by Blocked Amount” process, in book built public issues vide its circular dated July 30, 2008. It has now been decided to enable process of ASBA in Rights Issues on a pilot basis Merchant Bankers, Registrars and Self Certified Syndicate Banks (SCSBs) are advised to provide the ASBA facility in rights issues with suitable modifications to ASBA process specified by SEBI for public issue through book building route, as deemed fit. ASBA process in rights issue shall have the following features:

•  All shareholders of the company as on record date shall be eligible to apply through ASBA (hereinafter referred as “ASBA shareholder”) provided if he applies through a bank account maintained with SCSBs.
• The SCSB shall then block in the bank account, the application money specified in the application, on the basis of an authorization to this effect given by the account holder in the application. The application data captured by SCSB shall be made available to the Registrar.
• The Registrars shall take give suitable instructions to the SCSBs for transfer of money to the issuer account after satisfying the designated stock exchange about receipt of Minimum subscription of 90% in terms of provisions of SEBI (DIP) guidelines, and for any other matter relevant to a rights issue.