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QIPs gain currency

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  • Published 6.07.14

Mumbai, July 5: Indian companies continue to tap the QIP route to raise funds with commercial vehicle maker Ashok Leyland raising over Rs 666 crore through qualitative institutional placement (QIP) of shares and IDBI Bank indicating it may raise Rs 4,000 crore via this route.

According to capital market tracker Prime Database, companies have raised about Rs 12,151 crore in the first quarter of this fiscal through QIPs.

The total amount raised through QIPs saw a 10-fold increase over the same quarter last year.

So far this year, the largest QIP issue was by Reliance Communications, which raised Rs 4,808 crore, followed by Idea (Rs 3,000 crore) and Yes Bank (Rs 2,942 crore).

All these issues came after the election results were announced on May 16.

Market mavens expect more QIP issues in the coming months. According to estimates by Prime Database, Rs 30,000 crore could be raised through QIPs in the coming months, including those by banks such as the Union Bank and the Syndicate Bank.

Ashok Leyland recently raised over Rs 666 crore through allotment of shares at Rs 36 apiece to institutional investors. The Hinduja group company informed the stock exchanges that its fund raising committee approved the issue and allotment of 18.52 crore shares to institutions.

The issue price was at a premium of Rs 1.70 per share to the floor price of Rs 34.30 per equity share. The QIP opened on June 26 and got a good response.

Public sector lender IDBI Bank plans to come up with a QIP to garner Rs 4,000 crore to raise its capital adequacy ratio. The bank said it was looking to raise $7.5 billion through private placement, public issue or under a medium term notes programme during this fiscal.