VR Logo

Surge in QIPs and IPPs

Amidst the improved market sentiments, QIPs and IPPs have witnessed a sudden surge 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.

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: Raising money differently). In fact, six of the seven placements have come after the 2014 Lok Sabha election results (See: QIP and IPP issues in Q1FY15), finally indicating the return of confidence into the primary markets.

Raising Money Differently

QIPs/IPPsIPOs/FPOs/OFS
Financial YearIssue Size (₹cr)No. of issuesIssue Size (₹cr)No. of issues
2007-0821551335221990
2008-091892203421
2009-1039277644694144
2010-1121172464618257
2011-122123112398236
2012-1311249173431344
2013-1411393131523482
2014-15*1256975856
*April-June

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. It seems institutions still continue to dominate the Indian markets.

While this is not the end to the story and many more placements are in the pipeline. According to Prime Database (a Delhi-based tracker of primary markets) an estimated ₹30,000 crore worth of QIPs have been announced in the last few months. In recent times companies like Adani Enterprises, L&T and banks like IDBI Bank, Syndicate Bank, Union Bank have also announced their QIPs.

QIP and IPP issues in Q1FY15

CompanyDate of issueIssued shares Issue Price Issue Value
(in lakhs)(₹)(₹cr)
Ashok LeylandNot closed--600*
R-Comm27/06/201433831424808
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

Another noticeable point is that more financial institutions are preferring the QIP route with 3 out of 7 concluded in Q1FY15; surely despite the market recovery, it's still a while before primary markets see the action.