FIIs can hedge investment under ASBA

“Initial Public Offers (IPO) related transient capital flows under the Application Supported by Blocked Amount (ASBA) mechanism, foreign currency-rupee swaps may be permitted to the FIIs,” RBI said.

Foreign currency rupee swaps for hedging flows under ASBA, RBI said, will be available for 30 days only. The initiative is likely to facilitate FII investments under the ASBA route into equity market.

Under ASBA facility, the application money of investors remains blocked in his bank account until the process of allotment of shares is completed, eliminating any delays related to refunds for the unallocated shares.  

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