QIPs rise 10-fold in April-June

Mobilisation stood at Rs 12,151 cr versus Rs 1,222 cr in June 2013

Capital mobilised through qualified institutional placements (QIPs) in the secondary market has risen by 10 times in the June quarter from the same quarter a year ago. According to data from PRIME Database, six QIPs launched in April-June 2014 raised Rs 12,151 crore compared with Rs 1,222 crore raised in the same quarter in 2013.

A total of Rs 12,569 crore was raised in April-June 2014 through six QIP programmes and one institutional placement programme (IPP) launched by Muthoot Finance for complying with minimum public shareholding norms. The issue garnered Rs 418 crore.

The fund-raising was driven largely by a resurgence of optimism in the market and improved confidence in equity as an asset class brought on by the change of guard at the Centre, said Pranav Haldea, managing director of PRIME Database.

“All QIP issuances in the quarter have taken place after the election verdict was announced on May 16, clearly showcasing a revival of investor sentiment, backed by a strong secondary market. There is pent-up demand for capital, which is now being released,” Haldea said.

During the same quarter last year, eight IPPs raised about Rs 3,784 crore. All of them were launched to meet minimum public shareholding norms. The total amount raised in April-June 2013 through QIPs and IPPs stood at Rs 5,006 crore.

Of the six QIPS in June 2014, the largest one was by Reliance Communications at Rs 4,808 crore, followed by Idea Cellular’s Rs 3,000 crore and YES Bank’s Rs 2,942 crore.

The year ahead is likely to see many state-owned banks and infrastructure companies tapping the capital market through QIPs. Larsen & Toubro, Adani Enterprises, IDBI Bank and Syndicate Bank are among companies and banks looking to raise funds from institutions.