What is a Qualified Institutional Placement and what do I like about them (more to do with the QIP doc)
Time for a thread🧵🧵🧵🧵🧵🧵
What is a QIP?
A QIP or a Qualified Institutional placement allows a company to raise capital by issuing securities (by diluting equity) only to institutions.
Only Qib's or Qualified Institutional Buyers can participate in QIP's. This includes Mutual Funds, Foreign institutions
and Pension funds etc. (From my knowledge PMS' or any individual investor cannot participate in Qip's).
Just to give you an example:- Look at the investors who participated in the QIP of Saregama (750 crores)
Another example is the Qip of Deepak Nitrite in 2016 for the Phenol Project (size of the project was 1400 crores+)
The QIP witnessed participation from some of the top domestic institutional investors namely Reliance MF, Birla MF, ICICI Pru MF
Question arises, Why did SEBI allow for creation of QIP as an instrument for raising money?
QIP was introduced in the Indian Markets in 2006 by Sebi. As the regulator was concerned that the domestic companies were getting too dependent on raising money through