Are there any unique benefits in ASBA applications in case of IPOs?

The Applications Supported by Blocked Accounts (ASBA) provides an alternate mode of payment wherein the application money remains in the account of the investor till the time the allotment is confirmed. Till the basis of allotment is finalized, the amount is only blocked and the investor continues to earn interest on these funds. Effective January 01st 2016, SEBI has made it mandatory for all book built IPOs to only use the ASBA method for applying for shares. The ASBA only provides the company the authorization to block the sum without debiting the amount to the bank account.

ASBA has two distinct advantages for the investors. Firstly, the investor continues to earn interest on the application money till the allotment is finalized. Secondly, there is not time lag with respect to refunds as in case of zero allotment, your lien on blocked funds is simply released.