INDIA INC RAISES RECORD RS 49,000 CR VIA QIPS: PRIME DATABASE

INDIA INC RAISES RECORD RS 49,000 CR VIA QIPS: PRIME DATABASE
The total amount raised by companies through the qualified institutional placement (QIP) route has hit a record high in 2017, crossing Rs 49,000 crore, even as the stock markets have scaled new highs. A total of 33 companies took the QIP route in 2017 to raise Rs 49,702 crore, data sourced from Prime Database revealed. This includes some of the biggest issues in the past 11 years, with banks leading the way. State Bank of India’s (SBI) Rs 15,000 crore offer was the biggest in 2017 so far. SBI’s was biggest such equity issuance in the country, the lender had issued around 52.21 crore new shares at a price of Rs 287.25. SBI came with the offer to augment its capital adequacy ratio and for general corporate purposes. Kotak Mahindra Bank’s offer was the next biggest. The private lender raised Rs 5,803 crore in May 2017. Kotak’s offer was to enable its founder, Uday Kotak, to bring down his personal stake to the RBI mandated levels. Uday Kotak at present owns a 29.78% stake in the bank. Yes Bank which had to scrap its QIP in September 2016, successfully raised Rs 4,906 crore in March 2017. Federal Bank, DCB Bank and United Bank of India were the other banks which raised money through QIPs this year.
Hindalco, Brigade Enterprises, Delta Corp, Apollo Tyres, Edelweiss Financial Services and Premier Explosives were some of the other companies which raised money through QIPs. “It has been a phenomenal year for follow-on fundraising. Many large global fund managers and marquee pension funds have invested in QIP issues this year. Demand was strong from both foreign portfolio investors and domestic institutional investors. The companies which raised money are very large companies with a strong track record. Moreover, there is a strong fund flow especially from domestic retail investors, and mutual funds also participated in these issues in large numbers,” said V Jayasankar, Senior Executive Director and Head of Equity Capital Markets at Kotak Investment Banking.