Fund-raising via QIP plunges 49% to Rs 14,358 crore in FY16

Fund raising by Indian companies through Qualified Institutional Placement (QIP) route plunged by 49.5% to Rs 14,358 crore in 2015-16 amid sluggish equity markets.

In comparison, the listed firms had raised Rs 28,429 crore through QIP in the preceding financial year.

The funds have been raised for business expansion plans, refinancing of debt, to meet working capital requirements and for other general corporate purposes.

Market experts said sluggish equity markets dampened investor sentiment and kept firms at bay from raising funds from institutional investors through the QIP route.

The decline in fund-raising is in line with BSE's benchmark Sensex falling by 9.36% in the last financial year.

According to an analysis, listed companies tapped the QIP route to mop-up funds to the tune of Rs 14,358 crore in 2015-16.

In terms of numbers, 20 issues were witnessed during the period under review as compared to 51 issues in 2014-15.

The largest QIP of the past fiscal was of IndusInd Bank, which mobilised Rs 4,328 crore.

QIP is an alternative mode for listed companies to raise funds from domestic market.

In a QIP, a listed entity issues equity shares, fully and partly convertible debentures, or other securities that are convertible to equity shares to institutional investors.