Business & Economy
QIP issuances up 10 times in Q1 of FY15: Prime Database
New Delhi, July 1, 2014
The first quarter of the current fiscal ended with a mobilisation of Rs. 12,569 crore from institutions- Rs. 12,151 crore through Qualified Institutional Placements (QIPs) and Rs. 418 crore through Institutional Placement Programme (IPP), according to Prime Database, the country's premier database on the primary capital market.
According to Mr Pranav Haldea, Managing Director of Prime, the total amount raised through QIPs represents a 10-fold increase from the same quarter last year.
He said the Ashok Leyland QIP had not closed and a tentative amount of Rs. 600 crore had been taken into account.
QIPs & IPPs, taken together though, have increased by 151 per cent over the corresponding period of the preceding year (Rs.5,006 crore), he said.
By number, the period witnessed 6 QIPs and 1 IPP in comparison to 3 QIPs and 8 IPPs in the corresponding period of the preceding year.
The largest QIP was from Reliance Communications of Rs. 4,808 crore, followed by Idea Cellular (Rs.3,000 crore) and Yes Bank (Rs.2,942 crore). The only IPP was that of Muthoot Finance for Rs. 418 crore, made to comply with SEBI’s guidelines on minimum public shareholding.
Mr Haldea pointed out that all QIP issuances in the quarter had taken place after the election verdict was announced on May 16, thus clearly showcasing the revival of investor sentiment, backed by a strong secondary market.
"There has been a pent up demand for capital, which is now being released. The pipeline too is extremely robust. Some recent major announcements of large QIP issuances include Adani Enterprises and L&T. In addition, several banks have announced QIP plans to raise additional capital, including IDBI Bank, Syndicate Bank, Union Bank etc. In all, over Rs. 30,000 crore worth of QIPs have been announced in the last 3 months alone, likely to materialize in the near future," he said.
Mr Haldea added that the large number of IPPs made in the preceding year were primarily to meet with SEBI’s 3rd June deadline of minimum public shareholding.