How to Apply IPO through Syndicate Bank?

Syndicate Bank: An Overview

Syndicate Bank is a renowned but old commercial bank. The bank was established by TM A Pai, Upenndra Pai, and Vaman Kudya. Initially the bank was known as the Canara Industrial and Banking Syndicte Limited. However, 13 other banks along with the Syndicate bank was publicly owned on July 19, 1969. The bank has its head office at Manipal in India. Later, on 1st April 2020 the Syndicate bank merged with the Canara bank. Its multiple branches are spread across the country and running successfully.

Syndicate & Canara Bank Logo
Syndicate & Canara Bank Logo

In recent times, 20 banks merged with the Canara Industrial and Banking Syndicate Limited. The name later transformed to Syndicate Bank Limited in the year 1964. It had numerous branches across India, UK, and London.

However in the year 2019, Nirmala Sitharaman declared that the Syndicate Bank will be merged with Canara Bank. This resulted in an increase in the asset value for the banks. Overnight the merger caused the emergence of the 4th biggest government sector bank in India. The Canara Bank took the reins of the Syndicate Bank on April 1st, 2020.

The procedure for applying for an IPO online has various steps to be followed that make it easy for the investor. This article explains all these steps easily and would be sufficient enough to give you the basic information.

ASBA full form is “Application Supported by Blocked Amount”. It refers to the manner in which one can apply for an IPO.  Since 2016 it has become compulsory to apply for an IPO via this process under the SEBI or Securities and Exchange Board of India. SEBI controls the working of an IPO in India. The sanction to block the application money in a bank account is done by ASBA.

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Thus ASBA is a process through which IPO is applied. So in this process, your bank is allowed to hold the payment on your account, till you accept the allotment of stocks or reimbursements. Your bank blocks the payment as soon as you apply for the IPO.  This means that you will not be able to spend the funds for some other purpose. However, you can earn some interest on the payment amount. 

To use ASBA, there is a process to fill in the IPO application form. Once the application form is done, you need to provide it to the self-certified banks via its registered branches. The customer can apply the IPO via ASBA in 2 ways. The best method one can file an IPO is by the online net banking method. Or, one can file an IPO is through the application technique.

Apply Online IPO through ASBA Facility of Syndicate Bank
Apply Online IPO through ASBA Facility of Syndicate Bank

Basic requirements for an investor to apply for ASBA through Syndicate Bank are:

  1. The rules and regulations set up by the SEBI should be met for the investor to apply for the ASBA
  2. They should maintain a savings or a current account with the Syndicate Bank
  3. Details of the investor such as PAN number, Demat account along with the any DPs should be submitted to the bank
  4. The investor should maintain a limited balance in their account before applying for the IPO
  5. The investor cannot revise their bid.

Benefits for investor offered by ASBA Facility

  1. The process for the investors is free of cost and the investor need not pay any amount upfront
  2. It is easy to operate sitting at home
  3. The amount finalized and appropriate for the securities will be deducted from their bank account
  4. The money is paid to the IPO post the investor has applied for the shares and the IPO has allotted them to the investor
  5. The application form for ASBA is made simple and easier for investors
  6. The investor also has the interest earned on the blocked application amount.
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The application process of ASBA technique if applying online through net banking:

  1. Firstly, log in to the net banking portal of the respective bank.
  2. Now, select the IPO Application option from the menu.
  3. You will be taken to the IPO Online System.
  4. Please provide in the essential information as required.
  5. The names of the candidates should be in the same manner as mentioned in the savings account.
  6. By default, the net banking user will be 1st candidate.
  7. In the account, a hold is marked on the total amount at the maximum price bid.
  8. The application money will be blocked until the allotment is finalized.
  9. Post allotment of shares, the application money will be debited from your account.
Open Demat Account with Syndicate Bank
Open Demat Account with Syndicate Bank

Conclusion

The merger of the banks happens with the help of the finance minister of the country. This is generally done to unlock the potential of the banks via consolidation. Secondly, the big banks have the capacity to produce more cash. Thirdly, such mergers create a strong positive influence on the financial services of the country and more international recognizance. The risk-taking abilities of the banks increase in case of lending loans to companies or individuals.

The government of India declared the merger of the Syndicate bank into the Canara Bank, to make it a worldwide competitive frontrunner. This led the new bank to become the 4th largest bank in India after the State Bank of India, PNB+OBC+United Bank of India and the Bank of Baroda.  These unions of banks create broader geographical imprint and get the benefit of magnitude, scale, and power. The Syndicate+ Canara Bank has a total of 10,396 branches with 13,408 ATM’s across India.

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The unification of the banks has a positive bearing on the consumers of both banks. The new bank will have an increased share value in the markets. This will in turn increase the economic position as well as make it more lucrative. The consumer of each bank benefits due to the birth of a larger number of ATM’s. Not only this, but the customer is also open to more services provided by the bank. The consumer is better availed to credit facilities in the cities and towns. Also, better customer care facilities are provided. The government looks forward for the merger to increase the wealth present in the country.

IPO’s have major benefits. IPO or Initial Public Offering increases the money or capital for the company by selling its shares. The companies don’t have to reimburse the money raise via IPO’s. Secondly, companies can offer shares as an incentive or bonus. This is required to retain key investors of the company. Thirdly, by the issuance of IPO, the company’s get a good recognition in the national and international markets. Hence, a customer of Syndicate Bank has to follow the ASBA guidelines when applying for an IPO online.

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