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

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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

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