Why should I take loan for applying in an IPO?


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When an investor applies in an IPO, the full amount is blocked for around 2 weeks. If the IPO is of a popular company, the issue gets oversubscribed many times and only a small portion of the application is allocated to the investor. The best way to get maximum earnings from these IPO's is by getting the maximum shares allocated which can only be done by applying for more shares.

In this scenario IPO Funding offers an opportunity to investor to leverage its own funds in primary markets and thereby increase the allotment quantum manifold.

In simple words, a retail investor who want to apply for a maximum application amount of Rs 2 Lakhs but do not want block more than Rs 20,000. He can get remaining amount through IPO Funding.

While IPO funding is more popular in 'Non Institutional Investors (NIIs)' category of IPO investors, in recent years many retail investors are using this to fund good IPO's where chances of making money is high.



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