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Qualified Institutional Placement (QIP)

What is 'Qualified Institutional Placement - QIP'

A designation of a securities issue given by the Securities and Exchange Board of India (SEBI) that allows an Indian-listed company to raise capital from its domestic markets without the need to submit any pre-issue filings to market regulators. The SEBI instituted the guidelines for this relatively new Indian financing avenue on May 8, 2006.

Explaining 'Qualified Institutional Placement - QIP'

Prior to the innovation of the qualified institutional placement, there was concern from Indian market regulators and authorities that Indian companies were accessing international funding via issuing securities, such as American depository receipts (ADRs), in outside markets. This was seen as an undesirable export of the domestic equity market, so the QIP guidelines were introduced to encourage Indian companies to raise funds domestically instead of tapping overseas markets.


Further Reading


Informational effect of select private placements of equity: An empirical analysis in Indian capital market
journals.sagepub.com [PDF]
… Investors to issue Shares can be sold only to qualified institutional buyers (who are … 172 INFORMATIONAL EFFECT OF SELECT PRIVATE PLACEMENTS OF EQUITY: AN EMPIRICAL ANALYSIS IN … time gap has been found between the date of final placement documents and …

Qualified Institutional Placements-An Exploratory Study in the Indian ContextQualified Institutional Placements-An Exploratory Study in the Indian Context
papers.ssrn.com [PDF]
… Investors to issue Shares can be sold only to qualified institutional buyers (who are … 172 INFORMATIONAL EFFECT OF SELECT PRIVATE PLACEMENTS OF EQUITY: AN EMPIRICAL ANALYSIS IN … time gap has been found between the date of final placement documents and …

An empirical study on seasoned equity choice between qualified institutional placements and rights issues in IndiaAn empirical study on seasoned equity choice between qualified institutional placements and rights issues in India
link.springer.com [PDF]
… Investors to issue Shares can be sold only to qualified institutional buyers (who are … 172 INFORMATIONAL EFFECT OF SELECT PRIVATE PLACEMENTS OF EQUITY: AN EMPIRICAL ANALYSIS IN … time gap has been found between the date of final placement documents and …

The Choice between QIP and Rights Issue: Evidence from IndiaThe Choice between QIP and Rights Issue: Evidence from India
journals.sagepub.com [PDF]
… Investors to issue Shares can be sold only to qualified institutional buyers (who are … 172 INFORMATIONAL EFFECT OF SELECT PRIVATE PLACEMENTS OF EQUITY: AN EMPIRICAL ANALYSIS IN … time gap has been found between the date of final placement documents and …

Investment Banking-How to Regain Trust of InvestorsInvestment Banking-How to Regain Trust of Investors
papers.ssrn.com [PDF]
… Investors to issue Shares can be sold only to qualified institutional buyers (who are … 172 INFORMATIONAL EFFECT OF SELECT PRIVATE PLACEMENTS OF EQUITY: AN EMPIRICAL ANALYSIS IN … time gap has been found between the date of final placement documents and …

Capital Raising: Emerging Trends in Equity Markets in IndiaCapital Raising: Emerging Trends in Equity Markets in India
www.indianjournals.com [PDF]
… Investors to issue Shares can be sold only to qualified institutional buyers (who are … 172 INFORMATIONAL EFFECT OF SELECT PRIVATE PLACEMENTS OF EQUITY: AN EMPIRICAL ANALYSIS IN … time gap has been found between the date of final placement documents and …

Financial Engineering and Innovation as Risk Management Tools: The Case of Indian Companies During Global Financial Crisis.Financial Engineering and Innovation as Risk Management Tools: The Case of Indian Companies During Global Financial Crisis.
search.ebscohost.com [PDF]
… Investors to issue Shares can be sold only to qualified institutional buyers (who are … 172 INFORMATIONAL EFFECT OF SELECT PRIVATE PLACEMENTS OF EQUITY: AN EMPIRICAL ANALYSIS IN … time gap has been found between the date of final placement documents and …

Fund Raising by Indian Companies in 2010-Clear Domination of Domestic SourcesFund Raising by Indian Companies in 2010-Clear Domination of Domestic Sources
papers.ssrn.com [PDF]
… Investors to issue Shares can be sold only to qualified institutional buyers (who are … 172 INFORMATIONAL EFFECT OF SELECT PRIVATE PLACEMENTS OF EQUITY: AN EMPIRICAL ANALYSIS IN … time gap has been found between the date of final placement documents and …



Q&A About Qualified Institutional Placement (QIP)


How does one qualify as an institutional investor?

One must be registered with SEBI or stock exchanges under section 12(g) or section 45-IA of Companies Act 1956.

What is a Qualified Institutional Placement?

A QIP is a designation of a security issue given by the Securities and Exchange Board of India (SEBI) that allows an Indian-listed company to raise capital from its domestic markets without the need to submit any pre-issue filings to market regulators.

Who can invest in a qualified institutional placement?

Only qualified investors are allowed to invest in QIPs. These include banks, insurance companies, mutual funds and other financial institutions registered with SEBI or stock exchanges under Section 12(g) or Section 45-IA of Companies Act 1956.

Why did SEBI institute guidelines for this financing avenue?

The SEBI instituted guidelines for this relatively new Indian financing avenue on May 8, 26. Prior to the innovation of QIPs, there was concern from Indian market regulators and authorities that Indian companies were accessing international funding via issuing securities such as American depository receipts (ADRs), in outside markets. This was seen as an undesirable export of the domestic equity market, so the QIP guidelines were introduced to encourage Indian companies to raise funds domestically instead of tapping overseas markets.

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