Rating agencies raise red flag: QIP monitoring may hit disclosure wall

Disclosures around utilisation of issue proceeds not as exhaustive as IPOs: Rating agencies

Credit rating agencies (CRAs) have flagged concern that the inadequate disclosures around the use of funds raised through preferential issues and qualified institutional placements (QIPs) may possibly impede the monitoring process, said people in the know.
 

The capital markets regulator - Securities and Exchange Board of India (Sebi) - has mandated the monitoring of utilisation of issue proceeds for preferential issues and QIPs exceeding Rs 100 crore. To do so, the company has to appoint a Sebi-registered rating agency. A similar framework is already in place for initial public offerings (IPOs) and rights issues.
 

However, companies are required to make