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There is no doubt that one may need urgent funds at key moments in life. One may even wish to leverage their owned equity investments to get a loan. However, the securities one owns may not be sufficient to either yield the required loan amount or purchase further securities. In such a case, one may wish to bridge the deficit in their resources with funding from another source. A financing solution known as Margin Trade Funding is a worthwhile option to explore at this juncture.

Why Margin Trade Funding (MTF)?

Margin Trade Funding offers customers the opportunity to invest/leverage/trade in equity shares at a pre-defined margin. Margin Trade Funding, essentially, enables the customer to take a larger share of the equity market to a level that goes above his resources at hand. Thus, it is a mechanism that allows trading with borrowed funds or securities. It permits the customer to pay just a part of the total scrip purchase price, while Institute will provide a loan to account for the balance amount. However, the loan amount and scrip purchase is subject to the quality of the securities owned by the customer.

Is Margin Trade Funding for you?

If you are looking for increased exposure in the capital market, it is advisable to consider Margin Trading in India to leverage your existing shareholdings. Do note that you can pay the margin in cash or in the form of approved shares (as listed by Institute). Margin Financing is a far more practical option as opposed to futures trading, if you require long-term funding. It is also advised while investing in stocks not included on the futures list. In India, margin trading is allowed for Group I securities and those included in IPOs that satisfy the conditions of derivatives segment in the stock market.

With a margin loan, you gain the flexibility of earning money over smaller price movements against the large numbers of stocks you can purchase with the loan amount. You also have the option to margin-buy for stocks anticipated to rise in value, and margin-sell for stocks anticipated to fall. Institute charges interest on the utilised portion of the loan amount only.

Features of Margin Trade Funding
  • Collateral: Securities as per list of approved shares

  • Tenure: 1 year.

  • Minimum Loan Amount: Rs 25 lakh.

  • Loan Margin: 50% and above

Please ask us for the list of approved shares at the time of making the loan application.

Next steps…
  • Do you want complete product details? Download the brochure.

  • If you want to apply for Margin Trade Funding

  • Our Relationship Manager can meet you at your convenience.

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