Cos raise over $4-bn from QIP in FY15; $3-bn more in pipeline

Indian companies have raised over $ 4 billion (Rs 27,000 crore) from Qualified Institutional Placement (QIP) of shares so far in the current fiscal, while plans are underway to garner further funds worth an estimated $ 3 billion through this route.

The companies that have lined up their respective QIPs, where shares are issued to institutional investors, include public sector banking giant SBI and Aurobindo Pharma.

As per an analysis of funds raised through this route, companies have raked in about Rs 27,000 crore through QIPs during April-February period in 2014-15 -- almost double the amount of Rs 13,663 crore garnered in the entire previous fiscal.

Most of these funds were raised for expansion plans, refinancing of debt and to meet working capital requirement.

A sustained rally in the stock markets and improvement in investor appetite towards equity offerings have encouraged some of the large firms to mop funds through QIP route.

Interestingly, most of the funds were garnered through QIP issuances after a decision election mandate in May 2014, showcasing revival of investor sentiment, backed by a strong secondary market.

Going forward, SBI plans to launch a Rs 15,000 crore QIP issue, while Aurobindo Pharma aims to garner up to $ 350 million (Rs 2157.92 crore) through this route.

The companies appear to have preferred the QIP route to mop-up capital over other instruments in the current fiscal. The total funds collected through IPOs stand at just Rs 1,427 crore so far this fiscal, while another Rs 4,352 crore have been raised through rights issue.

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.