People require money for different purposes. It is not just about buying things. Money is required in big chunks if someone is willing to invest more so that he / she can earn more money in the long run. On an individual basis, each one of us wants to financially secure our future and in an attempt to do so, we may feel the need to raise money through various ways. Two such methods of raising money by retail investors or working professionals are IPO funding and ESOP funding.
Investors can earn significant profits by investing in IPOs (Initial Public Offers) of different companies, in a short period of time. Shortage of money is the main reason for investors not being able to leverage maximum from good IPOs. It is here that IPO funding or financing from a good NBFC like JM Financial can help HNIs (High Networth Individuals).
In this type of borrowing, the investor can pay a small margin amount while applying for a large application size of the IPO, while the lender (NBFC) pays majority of the amount. This funding methodology allows individuals to get higher allotments and earn more profits upon listing of the IPO.
ESOP (Employee Stock Ownership Plan) funding is an attractive technique employed by different organizations to keep their employees motivated. An employee can choose ESOP funding to buy company equity shares. Clearly, it serves as a loan against shares (of the company) that are granted to employees by the employer, so that they can buy more ESOPs for long term security and wealth creation.
There is one more funding method that is utilized by high networth individuals. We are talking about real estate funding. Here, individuals can opt for loan against property or choose NCDs (Non Convertible Debentures). At the same time, real estate developers can avail real estate project funding. A real estate NBFC like JM Financial offers such financing solutions to cater to a wide variety of audience.
I am a MBA in finance, looking after the finances of my dad’s company. My long-term goal is to have my own start-up, for which I am devoting a lot of time in studying real-life case studies related to ESOP funding, IPO funding, real estate NBFC funding, and more. Writing is my passion through which I stay connected with the world.
Writer, Nidan Narkhade is living in India. Nidan Narkhade is part of our authors community since and has published Second post on YD.
About First Post, Myths And Truths About Investment Banking
