InvestorQ : What is meant by Qip & why certain companies come out with such an issue?
Radhika Arya made post

What is meant by Qip & why certain companies come out with such an issue?

Answer
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Radhika Arya answered.
2 months ago


Qualified institutional placement (QIP) is an option which facilitates listed company to issue equity shares, fully and partly convertible debentures, or any securities other than warrants which are convertible to equity shares to a Qualified Institutional Buyer (QIB).

 This process does not restrict with common procedural requirements such as the submission of pre-issue filings to the market regulator. Market regulator, Securities and Exchange Board of India (Sebi) came up with QIP process in 2006 for listed companies in India to prevent them from having more dependence on foreign capital.

There are some criteria that companies need to fulfill that includes the company has to be listed on an exchange. This facility is in fact a positive facility for Indian forms to raising capital if they any time find themselves in lack of necessary capital. Many major companies and well-known banks have opted QIP to recover themselves from COVID -19 Lockdown impacts.