Qualified Institutional Placement

Qualified Institutional Placement India Inc seems to be on a specie heave spree. Recently companies like Hindalco, Bajaj Hindustan Limited, Emami, HREL take departed for QIPs to rhytidoplasty funds. According to estimates, only five companies have raised around Rs 8,500 Crore since April 2009, of which 95 per cent of the amount is on account of DLF, Unitech and India bulls very Estate. Excluding the five companies, thither atomic repress 18 39 others that have denote plans to raise a total of Rs 53,900 Crore finished the qualified institutional em localisation (QIP) highroad (issue of equity, warrants, etc), while a few others ar yet to adjudge pricing details. This is signifi outhouset as compared to the foregoing two years. Like every(prenominal) coin has two sides, the tend to raise funds alike has its set of pluses and minuses. Let us now understand the archetype called QIP in detail as below. What is QIP? Qualified institutional placemen t (QIP) is a capital raising tool, primarily used in India, whereby a listed company stand issue equity shares, to the full and partly standardised debentures, or any securities other than warrants which are convertible to equity shares to a Qualified Institutional emptor (QIB).

Apart from preferential allotment, this is the bustling method of private placement whereby a listed company can issue shares or convertible securities to a select multitude of persons. Companies going for QIP do not have to undergo rarify procedural requirements to raise this capital. wherefore was it introduced? In identify to hinder listed comp anies in India from developing an profuse d! ependence on irrelevant capital SEBI introduced the QIP process through a circular issued on May 8, 2006. Prior to the initiation of the qualified institutional placement, there was concern from Indian commercialize regulators and authorities that Indian companies were accessing global funding via issuing securities, much(prenominal) as American down payment receipts (ADRs), in outside markets. The complications associated with...If you want to get a full essay, order it on our website: BestEssayCheap.com

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