Explain IPO Funding in India?

IPO Funding is a short term loan which banks and other financial institutions provide to investors to fund their Initial Public Offer (IPO) application. An investor who would like to apply for equity shares in an IPO but do not have enough money can borrow the remaining amount from banks as a loan for 10 to 15 days. The Banks and Non Banking Financial Corporation (NBFC's) generally fund a part of IPO application while remaining is provided by the applicant.

IPO Funding is also known as IPO Financing or a Loan for applying in Public Issues.

The IPO Funding by banks is governed by RBI which allows banks to loan up to Rs 10 Lakhs for IPO Funding. The Loan Amount, Interest Rates and Duration of the loan vary from IPO to IPO.