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Surge in Placement Preferences

QIPs and IPPs have witnessed a sudden surge in the activity in the first quarter of FY15

In recent months, investor sentiments are on the up with the rise in the stock markets. While the mood is favourable, it is still early days for retail confidence to pick up for an active primary market to join the party. IPOs, FPOs and OFS are yet to make a loud noise. In the midst of all this, Qualified Institutional Placements (QIPs) and Institutional Placement Programme (IPPs) are witnessing a sudden surge in the activity.

April - JuneIssue Size ₹cr)No. of issues
2014-15 125697

Financial YearIssue Size ₹cr)No. of issuesIssue Size ₹cr)No. of issues

In the first quarter of FY15, seven companies issued ₹12,569 crore which is more than what was issued in the whole of FY14 and the highest in the first quarter of the preceding seven financial years (See: Table 2). In fact, six of the seven placements have come after the Lok Sabha election results (See: Table 3), indicating the return of confidence into the primary markets. If you read deep into the data; this is the first time when the number of issues and amount raised through IPOs, FPOs and OFS, where retail investors can also participate is lower than QIPs and IPPs in FY15, where only the institutions are allowed to participate.

While this is not the end to the story and many more placements are in the pipeline. According to Prime Database estimates ₹30,000 crore worth of QIPs have been announced in the last few months and Adani Enterprises, L&T and banks like IDBI Bank, Syndicate Bank, Union Bank have already announced their QIPs. Yet another noticeable point is that more financial institutions are preferring the QIP route with 3 out of 7 concluded in Q1FY15.

QIP and IPP issues in Q1FY15

CompanyDate of issueIssued shares (in lakhs)Issue Price (₹)Issue Value ₹cr)
Ashok LeylandNot closed--600*
Idea Cellular11/06/201422391343000
Yes Bank05/06/20145355502942
KSK Energy Ventures04/06/201440499400
SKS Microfinance27/05/2014177225398
Muthoot Finance29/04/2014254165418
*Tentative amount - Data Source: Prime Database and Value Research