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QIP issue proceeds drop nearly 30% to Rs 726 crore in May

 The Hawk |  2015-07-09 07:17:55.0  0  Comments

Mumbai: Fund-raising by Indian companies through issue of shares to institutional investors declined by 29.65 per cent to Rs 726 crore in May as compared to previous month - the second lowest amount in the current year. According to the latest report by the Securities and Exchange Board of India (Sebi), companies raised Rs 726 crore through the 'qualified institutional placement (QIP)' route in May as against Rs 1,032 crore mopped up in April. The funds raised in May are the second-lowest after Rs 225 crore mopped up in January this year. "In May, 2015, markets saw three QIP issues worth Rs 726 crore as compared to four QIP issues worth Rs 1,032 crore in April, 2015," the report said. "The cumulative amount mobilised through QIP allotments route during 2015-16, so far, stood at Rs 1,757 crore," the market regulator added. The data was available only till May. In April-May period last fiscal, the amount garnered through QIP route stood at Rs 816 crore. Market experts said that fund-raising through QIPs has slowed down in the last few months as companies are looking to sell shares at high valuations while investors are reluctant to buy shares at high prices. The experts also hold the view that companies are not looking to raise funds as the consumer demand has been slow. The funds raised through QIP issued surged to Rs 2,255 crore in February from Rs 225 crore in the previous month. However, following this, the amount garnered from QIP programmes has been declining month-on-month. Of the total three QIP issues in May, two issues were listed on the BSE, amounting to Rs 401 crore. The third issue amounting to Rs 325 crore was listed on both NSE and BSE. QIP is a capital raising tool, wherein a listed company can issue equity shares, fully and partly convertible debentures, or other securities that are convertible to equity shares to institutional investors. PTI

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