Listed companies raised over Rs 4,300 crore from institutional investors in the first seven months of this fiscal, a sharp plunge of 66 per cent from the year-ago level, mainly on account of volatile equity markets.
The funds have been raised for expansion, refinancing of debt and to meet working capital requirements.
Indian firms garnered Rs 4,318 crore via the qualified institutional placement (QIP) route during April-October period 2016-17, lower than Rs 12,658 crore mopped up in the same period of 2015-16, according to data available with the Securities and Exchange Board of India (Sebi).
In terms of numbers, 12 issues were witnessed during the period under review against 18 in the April-October period of last fiscal.
"The period under review has been pretty much volatile due to various developments both domestically and internationally leading to decrease the QIP activity," ICICI Securities Head Equity Capital Market Pranjal Srivastava said.
"Another major reason for lower activity in the QIP market is the absence of asset heavy and capital-intensive sectors such as infrastructure, power and real estate, where capital-raising tends to be in large sizes. These companies have been tapping the debt market due to various reasons," he added.
In October 2016, firms mopped up Rs 1,500 crore through QIP route, while Rs 2,210 crore was mobilised in September, Rs 230 crore in August, Rs 56 crore in July, Rs 61 crore in June and Rs 262 crore in May. There was no QIP issue in April.
In a QIP, a listed entity issues equity shares, fully and partly convertible debentures, or other securities that are convertible to equity shares to institutional investors.
Disclaimer: No Business Standard Journalist was involved in creation of this content
