Welcome to the latest edition of QIP Roundup,
where we delve into the dynamic world of Qualified Institutional Placements
(QIPs). A listed business can use the QIP capital-raising mechanism to sell
equity shares, fully and partially convertible debentures, or any other product
that can be converted into equity shares to qualified institutional purchasers.
QIPs are a preferred method of obtaining money for
listed firms due to their strong secondary markets and abundant liquidity. 42
QIPs were issued in the first three quarters (April to December) of FY24, with
the financial services industry accounting for ~25% of all those issuances.
- In FY24 (April to December), QIP listings have reached 4.2 times as compared to the entire FY23, with the highest number of QIP listings i.e., 20 occurring in the first half of FY24.
- During Q3 of FY24, 22 QIPs have collectively raised an average capital of around INR 1.4K Cr (still growing) from INR 1.1K Cr in the H1 of FY24.
- Total issue size of INR 30.5K Cr in FY24 (till December), which is ~95% of the total issue size in FY21, with a full quarter still to go in FY24.
- The average issue size of QIPs listed showed an increasing trend from the second half of FY22 to the first three months of FY24Q3 with a 2X increase from FY22H2 to FY24Q3.
- The average issue size in FY24Q3 (Oct-Dec) is the highest average issue size among the QIPs listed since FY21H2.
- In FY23 and FY24Q3, there was an increase in QIP listings for companies that had recently gone public (less than 5 years) compared to FY22.
- FY23 saw a prevalence of QIP listings among recently listed companies (less than 5 years) while, FY24 exhibited growth in QIP listings, encompassing both recent (less than 5 years) and long-established listings (more than 15 years) which may indicate a revival in the private capex cycle.