Why do people use 7% as the Interest rate for IPO GMP calculation?

Zerodha (Trade with the best stock broker)

Invest brokerage-free Equity Delivery and Direct Mutual Funds (truly no brokerage). Pay flat Rs 20 per trade for Intra-day and F&O. Open Instant Account and start trading today.

HNIs take short-term loans of a few crores to a few hundred crore rupees to apply in an IPO. These loans are issued by public and private sector banks, NBFC, and other financial institutions.

Most of these large-size loans come at around 7% to 8% per annum interest rate. They are issued for 7 days.

The interest rate on IPO funding varies by:

  1. By IPO
  2. A person who is taking IPO funding
  3. Financial institutions offering IPO funding


Add a public comment...