Companies raised Rs 5,401 crore through IPP in first half of the Year

Indian companies raised a total of Rs 5,401 crore through the Institutional Placement Programme(IPP) and the Qualified Institutional Placements(QIP) route in the first half of the financial year ending in March 2014.

The IPP route accounted for the lion’s share of this capital-raising, at Rs 4,180 crore. The QIP route was used for raising Rs 1,222 crore, according to information from Prime Database.

Real estate major DLF raised the largest sum through IPPs at Rs 1,863 crore, while ING Vysya Bank raised Rs 881 crore to top the table for QIPs.

Pranav Haldea, Managing Director of PRIME, suggested that the increase in the use of the IPP route was on account of a rush to meet the norms for the Securities and Exchange Board of India on minimum public shareholding.

“…the huge increase in funds raised through the IPP route (April- September 2012 mobilisation was only Rs 371 crore) was due to 10 companies choosing this route to comply with SEBI’s guidelines on minimum public shareholding,” said the statement from Prime.

QIPs may see some traction now, according to Haldea.

“…the huge drop in amounts raised from QIPs in the last 3 years from the highs of 2009-10 and 2010-11 can be attributed to sluggish/volatile market conditions. However, one may see an improvement in the QIP market in the coming months due to increased fund raising from banks to raise additional capital through this route,” said the note from Prime.