The Hindu Business Line : Rs 23,400 cr mopped up thru QIP route in 2007

“QIP has certainly emerged as a preferred instrument for entities to raise funds as it involves lesser disclosures and does not require a pre-issue filing with SEBI.”

Moumita Bakshi Chatterjee

New Delhi, Jan 5 Fuelled by mega-QIP (Qualified Institutional Placement) issues such as GMR Infrastructure and Suzlon Energy, India Inc is estimated to have raised over Rs 23,400 crore through QIPs in 2007.

During the year in reference, Indian companies through 41 QIPs, raised about Rs 23,400.34 crore. While 16 QIPs in 2006 had led to a cumulative mobilisation of about Rs 3,935.45 crore, the data may not be comparable to 2007, as QIP route was introduced mid-2006 to encourage Indian companies to raise funds from domestic market. “QIP has certainly emerged as a preferred instrument for entities to raise funds as it involves lesser disclosures and does not require a pre-issue filing with SEBI. In addition, it is seen as the fastest mechanism for raising funds.

“Also, as compared to a preferential issue, a QIP does not involve a lock-in and hence it offers an opportunity for liquidity, if an investor wants to exit,” said Mr Prithvi Haldea, Managing Director, PRIME, a database dedicated to the primary capital market.

Last month, marking the largest QIP issue by an Indian corporate, GMR Infrastructure Ltd mobilised Rs 3,965 crore at Rs 240 per share.

Later that month, Suzlon Energy Ltd raised about Rs 2,183 crore by selling shares to selected investors through the QIP route — the amount mobilised was primarily meant to repay part of the debt raised to fund the acquisition of REpower Systems AG of Germany.

In July 2007, IDFC raised Rs 2,100 crore through a QIP offering that saw significant interest from a number of high-quality institutional investors across Asia, Europe and the US. Other large QIPs during 2007 included that of UTI Bank, and Kotak Mahindra Bank.