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| Issuer: A company, whose equity shares are listed on a stock exchange having nation-wide trading terminals and which complies with the prescribed requirements of minimum public shareholding of the listing agreement, will be eligible to raise funds in the domestic market by placing securities with Qualified Institutional Buyers (QIBs). |
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| Securities: Securities that can be issued through QIP are equity shares or any securities other than warrants, which are convertible into or exchangeable with equity shares (hereinafter referred to as "specified securities"). |
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| A security, which is convertible into or exchangeable with equity shares at a later date, may be converted or exchanged into equity shares at any time after allotment of security but not later than sixty months from the date of allotment. The specified securities shall be made fully paid up at the time of allotment. |
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| Investors / Allottees: The specified securities can be issued only to Qualified Institutional Buyers (QIBs). Such QIBs shall not be promoters or related to promoters of the issuer, either directly or indirectly. Each placement of the specified securities issued through QIP shall be on private placement basis. |
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| A minimum of 10% of the securities in each placement shall be allotted to mutual funds. For each placement, there shall be at least two allottees for an issue of size up to Rs 250 crore, and at least five allottees for an issue size in excess of Rs 250 crore. |
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| Further, no single allottee shall be allotted in excess of 50% of the issue size. Investors shall not be allowed to withdraw their bids / applications after closure of the issue. |
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| Issue Size: The aggregate funds that can be raised through QIPs in one financial year shall not exceed five times the net worth of the issuer at the end of its previous financial year. |
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| Placement Document: Issuer shall prepare a placement document containing all the relevant and material disclosures. There will be no pre-issue filing of the placement document with Sebi. The placement document will be placed on the websites of the stock exchanges and the issuer with appropriate disclaimer to the effect that the placement is meant only for QIBs on private placement basis and is not an offer to the public. |
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| Pricing: The floor price of the specified securities shall be determined on a basis similar to that for GDR/FCCB issue, and shall be subject to adjustment in case of corporate actions such as stock splits, rights issue, bonus issue etc. |
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Other procedural requirements: The resolution approving QIP, passed under sub-section (1A) of Section 81 of the Companies Act, 1956 or any other applicable provision, will remain valid for a period of twelve months from the date of passing of the resolution. There shall be a gap of at least six months between each placement in case of multiple placements of specified securities pursuant to authority of the same shareholders
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