Fundraising via QIP hits Rs 1 trillion for the first time ever in history

Fundraising via the qualified institutional placement (QIP) route crossed the Rs 1 trillion-mark during calendar year 2024 (CY24), the highest amount raised ever in history through this route.

 

As many as 80 companies have raised a record Rs 1.13 trillion thus far in CY24, which is three times (3x) higher as compared to the same period in CY23 when 35 companies raised Rs 38,220 crore. The previous high was back in CY20 when 25 companies had mobilised Rs 80,816 crore through the QIP route.

 

If one is to consider the current / open QIPs (if they go through successfully) of real estate developer Godrej Properties, and cable & wire firm KEI Industries totaling Rs 8,000 crore, the total amount raised through the QIP route in CY24 will hit the Rs 1.21 trillion mark, data shows.

 

 

“CY24 was a good year for the secondary markets, and a great year for promoters to raise funds amid ample liquidity. A lot of promoters did just that – use the buoyancy in the secondary markets to their advantage and raise funds for future use,” explained Ambareesh Baliga, an independent market analyst. 

QIP fundraise

 

Earlier in November, Wockhardt, Varun Beverages and Zomato, too, raised Rs 17,000 crore, taking the total amount raised thus far in the current month to Rs 25,000 crore (including Godrej Properties and KEI Industries’ QIPs), which is the second highest amount raised ever in a single month.

 

Till October 2024, 77 companies had raised Rs 96,321 crore via the QIP route. Earlier in August 2020, a total six companies had raised Rs 39,032 crore – the highest amount ever raised via QIPs in a single month, data shows.

 

Fund deployment

 

Most companies that have raised funds via the QIP route in CY24 intend to use the proceeds primarily for repayment or pre-payment, thereby strengthening their respective balance-sheets to capitalise on growth opportunities.  That apart, these companies also plan to use the raised proceeds towards capital expenditure and general corporate purposes.  “Often seen as a product of bullish markets, QIPs thrive when valuations are high and markets trend upward. Because this presents a golden opportunity for businesses to raise equity with minimal dilution," said Manish Goel, founder and managing director of Equentis Wealth Advisory Services.

 

Zomato’s Rs 8,500 crore QIP is among the largest issues during the current calendar year.  The food delivery platform company proposes to utilise the proceeds for the expenditure towards setting up and running operations of Dark Stores and warehouses; advertising, marketing and branding initiatives across business offerings and investment in technology infrastructure and capabilities, including cloud infrastructure and software and towards development of  technological capabilities.

 

Godrej Properties, on the other hand, has launched Rs 6,000 crore QIP for acquisition of land and/or land development rights; and general corporate purposes.

 

Adani powers ahead

 

Meanwhile, Adani Energy Solutions has raised Rs 8,373 crore via QIP in August, making it the largest fundraise in the Indian power sector. Adani group’s flagship company, Adani Enterprises, too, had raised Rs 4,200 crore via QIP in October.

 

Anil Agarwal-controlled mining conglomerate Vedanta mobilised Rs 8,500 crore, and Samvardhana Motherson International raised Rs 4,938 crore capital via the QIP earlier this year.

 

Interestingly, since July, as many as 42 companies have raised Rs 72,293 crore, which accounted for 69 per cent total fundraising via QIP. During the period, BSE Sensex has remained flat at around 79,000 levels. The benchmark index has corrected 8 per cent from its record high level of 85,978.25 touched on September 27.

 

“Going ahead in CY25, a lot would depend on how the secondary markets play out. Buoyant markets will ensure that the QIP route for raising funds would be accessible for firms,” said G Chokkalingam, founder and head of research at Equinomics Research.  With record inflows and robust business outlook, markets, Goel said, are anticipating nearly Rs 1.5 trillion more QIP raise over the next few months. “It feels like the town’s best auction is in full swing—and the "goods" (businesses) are looking more promising than ever,” he adds. 

GPL seeks Rs 6K cr through QIP

 

Mumbai-based real estate major Godrej Properties Limited (GPL) will raise Rs 6,000 crore through qualified institutional placement (QIP) of shares. According to Bloomberg, the indicative issue size is about 23.1 million shares that would be issued at an indicative offer price of Rs 2,595 per equity share. The dilution of pre-issue outstanding equity share capital would be of about 8.3 per cent. The lock-up period of shares is 30 days.