What do you mean by ASBA and ESOP?

ASBA and ESOP

ASBA stands for “Application Supported by Blocked Amount”. It is a payment mechanism used in India for making initial public offerings (IPOs) and follow-on public offers (FPOs) of securities. Under ASBA, the applicant’s bank account block to the extent of the application amount.  The funds transfer to the issuer only if the application is successful. ASBA helps investors to apply for an IPO without having to transfer funds in advance.   It also ensures the safety of funds by blocking them in the applicant’s bank account until the allotment is made. Both ASBA and ESOP are different.

To visit:https://www.sebi.gov.in/

ESOP stands for “Employee Stock Ownership Plan”. It is a scheme offer by some companies to their employees that allows them to own a portion of the company’s shares. Under an ESOP, eligible employees grant stock options, which allow them to purchase a certain number of shares at a predetermined price after a specific period of time has elapsed. ESOPs often used as a tool to retain talented employees and to align their interests with those of the company’s shareholders.

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