Loans under this segment are typically short-term advances and primarily cater to the finance requirements of clients under our broking and wealth management businesses. Strong synergies within our businesses enables cross-selling of these financial products across our wealth management and investment banking verticals.
These loans facilitate our clients to capitalize on their investments by providing liquidity against investments in shares, mutual funds, and bonds, without the need to sell such securities. The product includes a portfolio of loan against mutual funds, loan against shares, loan against securities and loan against bonds. Loans may be business loans, or loans to meet short term working capital requirements or personal obligations.
These loans facilitate our clients to participate and to fund their settlement obligations of the stock exchanges. This facilitates a client to make investments in equity markets without having to deploy cash collateral towards the investment. A client can also take a leveraged position on the basis of the client’s existing investments. A loan is granted as a short term working capital demand loan against an approved list of shares and mutual funds.
ESOP funding is offered to the employees of various corporates to finance their employee stock options of the approved portfolio value, eliminating the need to arrange liquidity for this purpose while exercising ESOPs.
In cases where the client is an existing broker, it may avail funding to meet working capital requirements against the collateral of its existing investment.
It enables clients to participate in an IPO of equity shares, by giving a small margin and the balance is funded by us. This facility grants leverage to the retail clients to apply for a larger application size in public issues and procure higher allotments. IPO funding is for extremely short tenures, and is strictly advanced for the limited purpose of financing an application for an IPO subscription.