Fund-raising by Indian companies through issue of shares to institutional investors is gathering pace, rising to Rs 2,211 crore in August – highest in a month during the current fiscal.
Thus, the cumulative amount mobilised through the Qualified Institutional Placement (QIP) route during 2012-13 so far has reached Rs 4,651.5 crore, more than double the amount of Rs 2,163 crore garnered in the entire previous fiscal (2011-12).
"During August 2012, listed issuers raised Rs 2,210.7 crore through 12 QIP issues (all of which were on account of conversion of warrants issued on QIP basis into equity), according to latest data available with the market regulator Sebi (Securities and Exchange Board of India).
This was 16 per cent higher than Rs 1,898 crore garnered through 8 issues in July.
QIP is a capital raising tool, whereby a listed company can issue equity shares, fully and partly convertible debentures, or other securities that are convertible to equity shares to institutional investors.
As per Sebi data, three listed companies had raised a total of Rs 517.6 crore in June, two firms raked in Rs 60 lakh in May and Rs 24.7 crore was mopped-up through two issues in April.
Market experts believe, fund-raising through QIPs had slowed down in the past couple of months due to volatile market conditions globally but is now witnessing a renewed interest from investors, though a lot would depend on valuations going ahead.
"Most investors were reluctant to participate in QIPs since shares of many companies that made placements to institutional investors were trading below the issue price. Now, we are witnessing a renewed interest from investors, though a lot would depend on valuations," an expert said.