Qualified Institutional Placement (QIP) is a mode of raising capital for listed companies wherein submission of legal paperwork to market regulators is not necessary. QIP was started by Securities and Exchange of Board of India (SEBI) to make companies lesser dependent on foreign capital resources. As Laxmi Vilas Bank financial stability was at stake due to bad loans on the company’s account, QIP mode was a quick remedy to solve the solution. As QIP does not require standard regulatory compliance, the bank can raise capital faster compared to Follow-On Public Issue (FPO).
The merger of Indiabulls Housing Finance with Laxmi Vilas Bank will be now known as Indiabulls Lakshmi Vilas Bank. The merged entity will have a combined loan book of Rs 1.23 lakh crore. MD and CEO of Laxmi Vilas Bank, Parthasarathi Mukherjee in a news with Times of India said that this deal will be beneficiary for the bank by quoting that "I would say we found a rich parent."