NEW DELHI: Fundraising through qualified institutional placements (QIPs) reached an all-time high in 2024, exceeding the Rs 1 lakh crore mark for the first time. This milestone, fueled by strong stock market conditions and higher valuations, saw Indian companies raise Rs 1,21,321 crore via QIPs by November, as per data from the Prime Database.
This marks an increase of over two times compared to the Rs 52,350 crore raised in the previous calendar year. Analysts highlighted that this growth highlights market resilience as a key driver, with companies expected to continue raising capital through QIPs.
The data also revealed that 82 companies had accessed capital markets through QIP issues by November this year, compared to just 35 companies that raised Rs 38,220 crore during the same period last year.
QIP is a fast-track method for listed companies and investment trusts to raise funds from institutional investors. It enables them to secure capital swiftly without the requirement of pre-issue filings to market regulators.
Key players in this record-breaking year include the Vedanta group and food delivery giant Zomato, both raising Rs 8,500 crore each through QIPs. They were closely followed by Adani Energy Solutions and Varun Beverages, which raised Rs 8,373 crore and Rs 7,500 crore, respectively.
The data also stated that JM Financial, a financial services company, emerged as the leading manager for QIP transactions, overseeing 16 issues.
Chirag Negandhi, managing director at JM Financial Ltd told news agency PTI, “In 2024, promoters have taken advantage of strong market conditions, leveraging higher valuations and upward trends in the secondary market to raise funds. Our performance reflects our superior distribution capabilities and our ability to handle complex transactions and achieve results for our clients.”
Pranjal Srivastava, partner-investment banking at Centrum Capital, also resonated with the same views, “CY 2024 has been a landmark year for all forms of public market fundraise, be it IPO, QIPs, or blocks. Listed companies raised record levels of funds through QIPs to meet their funding requirements”.
Srivastava stated that the strong secondary markets, abundant domestic liquidity, and overall positive sentiment created an ideal environment for companies to raise funds, ensuring that all QIPs received strong subscription levels.
“The record-breaking fund mobilisation by companies through QIP is the direct consequence of a booming stock market. Experience tells us that a booming secondary market leads to a booming IPO and QIP market,” V K Vijayakumar, chief investment strategist at Geojit Financial Services, said.
The QIP route made a remarkable comeback in CY23, following a decline in 2022, the lowest in eight years when only Rs 11,743.29 crore was raised through 14 issues due to stock market volatility, high valuations, and other factors.
The QIP surge this year reflects the strong inflow from retail and domestic investors. Given the Indian stock market’s resilience over the past four years and ongoing institutional demand for quality issues, promoters are taking advantage of the favorable market conditions, Vijayakumar said.
With Torrent Power, Bharat Forge, Senco Gold, and Sammaan Capital’s QIP fundraising worth more than Rs 8,000 crore in December, analysts expect India Inc to go up further by the end of the calendar year, cementing 2024 as a milestone year for QIPs in India.
