New funding mechanism takes wing for HNIs bidding Rs 2-10 lakh in an IPO

Under the new mechanism, non-banking finance companies (NBFCs) are providing up to Rs 8 lakh on a margin amount of Rs 2 lakh for a flat fee of Rs 2,000, said industry sources.

A new funding mechanism for just-concluded initial public offerings (IPOs) has come to fruition. Under this structure, non-banking financial companies (NBFCs) will provide up to Rs 8 lakh on a Rs 2-lakh margin for a flat fee of Rs 2,000, inform industry sources.

Using the borrowed sum and Rs 2 lakh of their own, individual investors can apply to the freshly-minted category for high networth individuals (HNIs).

This new segment is a sub-category within the HNI quota for placing bids between Rs 2 lakh and Rs 10 lakh in an IPO.

“By availing of the new IPO funding, individual investors