JSL, Alok Industries QIPs to open in next seven days

JSL and Alok Industries have announced that their books will be open for qualified institutional bidders (QIB) in next seven days.

JSL will mobilise Rs 750 crore and Alok Industries has proposed to raise upto Rs 450 crore through the QIB route, according to announcements made by these firms to the Bombay Stock Exchange (BSE). These companies will use the proceeds for capital expenditure and working capital requirements,

With stock market sentiments bullish, qualified institutional placement (QIP) is also back into action.  QIP is a capital raising tool, whereby a listed company can issue equity shares, fully and partly convertible debentures, or any securities other than warrants that are convertible to equity shares to a QIB. Through QIP, companies can raise money with minimum disclosure.

As many as eight companies had raised Rs 3,218 crore through QIP route so far in current calendar year 2010. The list includes Yes Bank (Rs 1,034 crore), Shriram Transport Finance (Rs 584 crore), Usha Martin (Rs 468 crore) and Radico Khaitan (Rs 342 crore).

Manappuram General Finance, Electrosteel Castings, Mahindra Forgings and Karnataka Bank had mobilised between Rs 160-250 crore each through QIP route.

Most of the companies are raising funds to fund new projects and repay debt, and the banks raised funds to enhance capital adequacy ratio.

JSL slipped 2% to Rs 104, while Alok Industries was down 1% at Rs 23 on the BSE.