The economic recovery has helped as much as eleven companies to raise funds of up to Rs 4,298 crore, by placing shares to qualified institutional buyers during the current calender year till date, a study has said.
"In 2010, so far 11 companies like Yes Bank, Mahindra Forgings and Radico Khaitan have made qualified institutional placement (QIP), with an issue size of Rs 4,298.28 crore, with BFSI (banking, financial services & insurance) taking lead in the pack," according to a study jointly done by domestic brokerage firm SMC Capitals and industry body Assocham.
In comparison to an initial public offer (IPO), follow-on public offer (FPO) or any other fund raising mode, which take about four to five months, QIP takes only four-five days, it added.
Through QIP, companies can get cash from a few large investors called qualified institutional buyers, which are generally large institutional investors, with an expertise to evaluate market offerings and invest large amounts.
"About 50 companies are already in the QIP pipeline with valid board resolutions in hand in 2010 (calender year)," Assocham President Swati Piramal said.
After the economic slowdown, the recovery commenced from April 2009 and the QIP instrument proved to be of a great source of funding for the Indian corporate sector, the study added.
It said, the Securities and Exchange Board of India (Sebi) has created a highly flexible, timely and effective instrument, equipped with relatively simple regulatory requirements, which are beneficial to the issuing companies and investors.
In 2009 (calender year), 45 Indian companies, including Axis Bank, Unitech Punj Lloyd and HCL have raised money through QIP compared to merely four firms in 2008, the study said.
