Fundraising via the qualified institutional placement (QIP) method exceeded Rs 1 trillion in calendar year 2024 (cY24), the greatest sum ever raised through this method of fundraising.
So far in CY24, 80 companies have raised a record Rs 1.13 trillion, which is three times (3x) more than the same period in CY23, when 35 companies raised Rs 38,220 crore. The previous high was set in CY20, when 25 companies raised Rs 80,816 crore via the QIP method.
If one considers the existing / open QIPs (if they are successful) of real estate developer Godrej Properties and cable & wire provider KEI Industries totaling Rs 8,000 crore, the total sum raised through the QIP route in CY24 will reach Rs 1.21 trillion, data suggests.
"CY24 was a strong year for the secondary markets, as well as a great year for promoters to raise capital in an environment of adequate liquidity. Many promoters took advantage of the buoyancy in the secondary markets to generate funds for future usage," Ambareesh Baliga, an independent market analyst, noted.
Wockhardt, Varun Beverages, and Zomato also raised Rs 17,000 crore in November, bringing the total amount raised this month to Rs 25,000 crore (including Godrej Properties and KEI Industries' QIPs), the second highest sum ever raised in a single month.
Till October 2024, 77 firms had raised Rs 96,321 crore through QIPs. Earlier in August 2020, six businesses raised a total of Rs 39,032 crore through QIPs, the highest sum ever raised in a single month.
Fund deployment
Most companies who received money through the QIP route in CY24 expect to use the proceeds largely for repayment or prepayment, thereby strengthening their respective balance sheets and capitalising on growth potential.
Apart from that, these companies intend to use the funds collected for capital expenditure and general corporate reasons.
"QIPs, which are commonly associated with bullish markets, thrive when valuations are high and markets are trending upward. Because this provides an excellent opportunity for firms to raise equity with low dilution," stated Manish Goel, founder and managing director of Equentis Wealth Advisory Services.
