Fund-raising via QIP rises seven-fold to Rs 16,000 cr in FY13

Fund-raising by issuance of shares to institutional investors has jumped seven-fold to nearly Rs 16,000 crore in the financial year 2012-13 on the back of revival in the stock market's fortunes.

A total of 45 Qualified Institutional Placements (QIPs) together raised a total of Rs 15,996 crore in 2012-13, marking a sharp rise from Rs 2,163 crore garnered through QIPs in the preceding fiscal, as per the latest data from market regulator Sebi.

"The cumulative amount mobilised through QIP route during 2012-13 stood at Rs 15,996 crore through 45 issues," it said.

In 2010-11, Indian firms had garnered Rs 25,850 crore cumulatively through 59 issues via QIP route.

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.

According to market experts, positive trends in the capital market during 2012-13 helped mop up these funds. It was easy to raise funds from institutional investors compared to retail investors.

"Buoyed by market sentiment, the companies have used the QIP route to raise funds," CNI Research head Kishor Ostwal said.

Foreign Institutional Investors, the main driver of the Indian equity market, pushed the BSE's benchmark Sensex by over 8% in last fiscal.

Interestingly, there was not a single fund-raising via QIP route in October 2012, while most of the capital (Rs 5,676 crore) were rasised in February this year.