QIP issuance rises 10-times to Rs 12,151 cr in Apr-Jun quarter

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Indian companies mopped-up a staggering Rs 12,151 crore through issue of shares to institutional investors in April-June period of 2014, a 10-fold jump from the year-ago period, signalling a revival of investor sentiments.

According to a report by Prime Database, fund raising through Qualified Institutional Placements (QIP) route surged from Rs 1,222 crore in April-June period of 2013-14 to Rs 12,151 crore in the first quarter of the current fiscal.

However, there was not a single QIP issuance in the first quarter of 2012-13.

By number, the first quarter of 2014-15 witnessed six QIPs as compared to three in the same period last fiscal.

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).

"It is significant to note that all QIP issuances in the quarter have 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," Prime Database Managing Director Pranav Haldea said.

Moreover, he said that the pipeline for QIP issuance too is extremely robust. Some recent major announcements of large QIP issuances include that of Adani Enterprises and Larsen & Toubro.

In addition, several banks including IDBI Bank, Syndicate Bank and Union Bank have announced QIP plans to raise additional capital

"In all, over Rs 30,000 crore worth of QIPs have been announced in the last 3 months alone and are likely to materialise in the near future," Haldea said.

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