Fundraising through rights issue hits 10-year high, QIPs see a fall

Nearly Rs 180 billion mopped up this year, 2.7 times last year's tally; spike in market volatility a key reason

Fundraising through the rights issue route has hit a 10-year high this year. So far, nine companies have raised Rs 178.6 billion — nearly three times (2.7 times to be precise) of last year’s tally — by way of rights issues.

Investment bankers said with weakness in the broader market and spike in volatility, companies have been forced to look at rights issues over the preferred qualified institutional placement (QIP), another way of raising capital where shares are privately placed to a set of investors.

This year, Rs 161 billion has been raised by way of QIPs, 70 per cent