UPSC Prelims Practice Questions — Making sense of the biggest IPO in history

Q1. In the context of India's primary capital markets, which were contrasted with the US process during the SpaceX IPO, the term 'ASBA' most accurately refers to:

  • A. A SEBI-approved facility under which an investor's IPO application amount remains blocked in their own bank account until shares are allotted, after which only the allotment amount is debited.
  • B. A RBI-administered scheme allowing resident Indians to remit foreign exchange for purchase of shares listed on overseas stock exchanges.
  • C. A mechanism through which qualified institutional buyers underwrite the unsubscribed portion of a public issue at the cut-off price.
  • D. A book-building method in which the issue price is discovered through reverse auction among anchor investors before the issue opens.

Q2. With reference to the routes available to a resident individual in India to gain exposure to SpaceX shares following its June 2026 Nasdaq listing, which of the following are correctly identified?

  1. Purchase on the secondary market through an international brokerage account under the Liberalised Remittance Scheme (LRS).
  2. Direct subscription to the primary issue using the domestic ASBA facility.
  3. Indirect exposure through SEBI-registered mutual fund schemes that invest in overseas equities.
  4. Direct primary allotment through a dedicated SEBI portal for overseas IPOs.
  • A. 1 and 3 only
  • B. 2 and 4 only
  • C. 1, 2 and 4
  • D. 3 only

Q3. In India, the Liberalised Remittance Scheme (LRS) — the principal regulatory route under which resident Indian individuals may invest in overseas-listed equity such as SpaceX shares — is administered by which one of the following authorities?

  • A. Securities and Exchange Board of India (SEBI)
  • B. Reserve Bank of India (RBI), under the Foreign Exchange Management Act, 1999
  • C. Department of Economic Affairs, Ministry of Finance
  • D. International Financial Services Centres Authority (IFSCA)