Capital raising via QIP in first half tops Rs 20,000 cr

Buoyed by sharp rally in the stock market and robust inflows from foreign institutional investors

Listed companies have raised a little more than Rs 20,000 crore through qualified institutional placements (QIPs) in the first six months of financial year 2014-15, the most in five years.

The capital raising was buoyed by a sharp rally in the stock market and robust inflows from foreign institutional investors (FIIs).

Nearly Rs 20,600 crore was raised through QIPs and institutional placement programmes (IPP) between April and September, according to Prime Database.

QIP and IPP are the two fund raising routes meant for institutional investors such as FIIs, mutual funds and insurance companies.

The amount raised by India Inc through these routes in the first half of FY15 was nearly four times more than the same period of 2013-14 and most since FY10.

In the first six months of FY15, there were a total of 19 QIPs and one IPP, compared to three QIPs and 10 IPPs in the April-September period of the FY14.

The total funds raised through these routes this year could be more than Rs 30,000 crore.

“There was a pent-up demand for capital, which is now being released,” said Pranav Haldea, managing director, Prime Database.

“The pipeline, too, is extremely robust, comprising issuers from the private sector, as also several banks which have announced QIP plans to raise additional capital, all of which is likely to materialise in the near future.”

Experts said the equity capital raised by companies was to repay debt and repair their balance sheets.

The biggest QIP offering in the first half was by Reliance Communications, which raised Rs 4,808 crore.