Frequently Asked Questions

IPO Financing

What is IPO?

IPO stands for Initial Public Offering. A private company who has intention to raise funds, could issue common stocks. IPO is the first offering of the stocks to the public. After IPO shares have been listed, investors will be able to trade the shares freely in the Secondary market.

What is IPO Financing?

IPO Financing is a special financing scheme which allows you to apply for more shares with small initial capital outlay (minimum of 20%copayment).

What are the risks involved in IPO financing?

  1. In the event of over subscription, you may not get all the shares you applied for.
  2. The share price may drop below the IPO offer price on listing day.
  3. The gains from the allotted shares may be lower than the charges and interest costs.
  4. If the IPO is in foreign denominated currencies, there may be foreign exchange rate risks. The foreign exchange rate will be based on PSPL’s Published Rate at poems web-site on subscription date.

Who is eligible to apply for IPO Financing?

Anyone above the age of 21 years old can apply for IPO Financing via any ledger-based account eg. Cash management, Custodian, Margin or Financial account.

Does IPO Financing allow joint application?

No. IPO Financing is not allowed for joint application.

How do I participate in IPO Financing?

If you have an existing ledger based account with us, you can submit an IPO Financing Application form with your signature and the 20% co-payment to us. You may also choose to visit any of our investor centers for further assistance.

Is there a minimum IPO financing application amount?

No, there is no minimum application amount.

If I have applied through Internet banking/ATM, Could I apply for more shares through IPO Financing?

No. Multiple applications are prohibited. (Clients are not allowed to subscribe through Phillip and internet banking/ATM simultaneously)

When is the last day to apply for IPO Financing?

The closing date is 5 business days before the official IPO closing date. Please ensure that the co-payment is put into the ledger based account by the IPO financing closing date.

How much can I borrow for the IPO Financing?

You may borrow up to 80% of the intended IPO application amount.

I have an existing trading account with Phillip Securities, can I use the account to apply for IPO Financing?

Yes. As long as your account is a ledger based account, i.e. Cash management , Margin, Financial or custodian account.

Will I get the full allocation of what I applied for?

Allocation of shares is subjected to the overall subscription rate in the market. If the application of IPO shares is over subscribed, you may not get any/full allocation.

How would I know how many shares I was allocated?

You will be informed once the result is confirmed.

Will I be receiving a confirmation statement?

Yes; You will receive a confirmation statement of allocated IPO shares.

Do I have to pay the principal loan plus interests immediately upon successful IPO allotment?

  1. Cash Management and Custodian Account

    Client will need to make the full payment for the successful allotment on the first day of IPO before 3pm. If payment is not in account by then, full contract of the shares will be force sold.

  2. Margin Account and Financial Account

    After successful allotment, you do not need to pay the principal loan plus interest immediately. However, the margin ratio must be maintained above the respective required margin level.

    If you do not pay the principal loan plus interest and the margin ratio falls below the Maintenance Margin Ratio, there will be a Margin Call on you and top up will be required to fulfill the margin call within the stipulated period.

When will the need for the maintenance of margin ratio commence?

If the allotment is successful, you will need to maintain the margin ratio on the first day of trading. Should the margin ratio falls below the maintenance margin level, you will receive a margin call.

What happens if I am not allotted with the full IPO subscribed for?

All un-utilized funds will be refunded to your trading account.

How do I deposit the down payment?

You may pay by cheque or EPS the amount into your account.

How much is the initial capital required to apply for IPO shares through IPO Financing?

It is subjected to your intended loan amount, you may pay as low as 20% of the IPO and using IPO Financing to finance the rest.

How much should I pay after the allocation is confirmed?

  1. i) Cash Management and Custodian Account
    Full amount is expected on the 1st trading day of IPO by 3pm.
  2. ii) Margin Account and Financial Account
    Client would only need to maintain the margin ratio.

What is the interest rate and when will the interest rate be charged?

The interest rate payable on the amount borrowed is fixed at 5% p.a. for minimum of 5 days during the application period. Regardless of the allocation result, the interest rate is non-refundable.

What is the handling fee for IPO Financing?

The handling charge is $10.70 per application, regardless if application is successful.

Who can I contact for more detailed information with regards to IPO Financing?

You can contact us through our Customer Service Hotline at 6531 1555, or email to talktophillip@phillip.com.sg.