Fund raising through QIP hit 3-mnth high at Rs 2,832 cr in May

The total capital raised via QIP has reached to Rs 10,370 crore since the beginning of 2013

Fund raising by Indian companies through issue of shares to institutional investors rose to three-month high to a staggering Rs 2,832 crore in May.

With the latest fund mop-up, the total capital raised via qualified institutional placement (QIP) has reached to Rs 10,370 crore since the beginning of 2013.

According to the latest data available with the market regulator Securities and Exchange Board of India (Sebi), companies raised Rs 2,832.6 crore through the QIP route in May, a jump from Rs 387 crore mopped up in April.

This was the highest fund garnered in a single month since February, when companies had mopped-up Rs 5,676.2 crore.

QIP is a capital raising tool whereby a listed firm can issue equity shares, fully and partly convertible debentures, or other securities that are convertible to equity shares to institutional investors.

"During May 2013, there were five QIP issues worth Rs 2,832.6 crore in the market as compared to four QIP issues worth Rs 387 crore in April 2013," the regulator noted.

Market experts believe that a renewed interest from investors is being witnessed that helped companies to raise capital through QIP route.

Meanwhile, the BSE's benchmark Sensex surged 256 points, or 1.31%, in May.

In 2012-13, firms garnered nearly Rs 16,000 crore through issuance of shares to institutional investors against Rs 2,163 crore garnered through QIPs in the previous fiscal.

The experts had attributed the seven-fold growth to the revival in the stock market's fortunes. In 2010-11, Indian firms garnered Rs 25,850 crore cumulatively through 59 issues via QIP route.