QIP is a capital raising tool whereby a listed firm can issue equity shares, fully and partly convertible debentures.
New Delhi: Fund-raising by Indian companies through issue of shares to institutional investors declined by 65 percent to Rs 387 crore in April over the previous month.
According to the latest data available with the market regulator Sebi, companies raised Rs 387 crore through the Qualified Institutional Placement (QIP) route in April, a slump from Rs 1,110 crore mopped up in March.
QIP is a capital raising tool whereby a listed firm can issue equity shares, fully and partly convertible debentures, or other securities that are convertible to equity shares to institutional investors.
"During April 2013, there were four QIP issues worth Rs 386.6 crore in the market as compared to two QIP issues worth Rs 1,110.1 crore in March 2013," the Sebi data shows.
Market experts said that fund-raising through QIPs has slowed down in April due to volatile market conditions.
"Most investors were reluctant to participate in QIPs since shares of many companies that made placements to institutional investors were trading below the issue price. Now, we are witnessing a renewed interest from investors, though a lot would depend on valuations," an expert said.
Meanwhile, the BSE's benchmark Sensex surged 668 points or 3.5 percent during April.
In 2012-13, firms garnered nearly Rs 16,000 crore through issuance of shares to institutional investors against Rs 2,163 crore garnered through QIPs in the previous fiscal.
The experts had attributed the seven-fold growth to the revival in the stock market's fortunes.
In 2010-11, Indian firms garnered Rs 25,850 crore cumulatively through 59 issues via QIP route.