IPO funding is a short-term loan that banks and financial institutions offer to investors to help them finance their Initial Public Offering (IPO) applications. Investors who wish to apply for equity shares in an IPO, but don't have the funds can borrow money from banks for a loan of 10 to 15 days. Banks and Non Banking Financial Corporations (NBFC) typically fund a portion of an IPO application, while the applicant provides the remainder.
IPO funding is also known by IPO Financing, or a loan for applying in public issues.
RBI regulates IPO Funding. Banks can borrow up to Rs 10 Lakhs to finance IPO Funding. From IPO to IPO, the amount of the loan, interest rates and duration will vary.