During January-July 2015, Indian companies raised Rs 17,124 crore (US$ 2.54 billion) through Qualified Institutional Placement (QIP) route for the purpose of business expansion, debt refinancing and working capital requirements.
Qualified institutional placement (QIP) is a capital raising tool, whereby a listed company can issue equity shares, fully and partly convertible debentures, or any securities other than warrants, which are convertible into equity shares, to a qualified institutional buyer (QIB). Apart from preferential allotment, this is the only other speedy method of private placement for companies to raise money. It scores over other methods, as it does not involve many of the common procedural requirements, such as the submission of pre-issue filings to the market regulator.
According to an analysis of data available with Sebi, firms have mopped up Rs 17,124 crore through 25 issuance during the January-July period in 2015. Indian firms had raised Rs 31,684 crore (US$ 4.7 billion) in 2014.
With respect to the funds raised by QIP this year, there was a large difference between the capital raised through QIPs and funds garnered via other routes like Initial Public Offer (IPO).
Together a sum of Rs 11,500 crore (US$ 1.72 billion) was raised by way of rights issue, while over Rs 5,000 crore (US$ 0.74 billion) was raised through IPOs till date in 2015. Several other firms have also planned to raise fund through QIP in coming months.
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