Not only IPOs, 2017 was blockbuster for QIPs too; SBI issue biggest ever

NEW DELHI: The year 2017 has been an unprecedented year for the IPO market, as a massive Rs 70,000 crore was raised through 122 issues.

However, it was not only the IPO mart that garnered such traction. Data shows fund-raising via QIPs (qualified institutional placement) also hit an all-time high of Rs 40,700 crore via 28 issuances so far this year.

This number has surpassed the previous year's Rs 13,400 crore, and is the highest till date, beating the earlier peak of Rs 39,300 crore in FY10, says Motilal Oswal in its report.

QIP is one of the fund-raising routes for listed companies.

According to Investopedia, Securities and Exchange Board of India (Sebi) allows an Indian-listed company to raise capital from the domestic market without the need to submit any pre-issue filings to market regulators. Sebi instituted the guidelines for this relatively new Indian financing avenue on May 8, 2006.

The year also witnessed the biggest QIP issue in the history of Indian market of SBI with an issue size of Rs 15,000 crore.

The top five companies have contributed 78 per cent i.e. Rs 31,600 crore of the total QIP raised so far in FY17-18. The top issuances include SBI (Rs 15,000 crore), Kotak Mahindra Bank (Rs 58,000), Bajaj Finance (Rs 45,000 crore), Interglobe Aviation (Rs 3,800 crore) and Federal Bank (Rs 2,500 crore) were the top issuances for FY18 so far.

Of the 28 issues, 11 have delivered 10 per cent returns over the issue price. The top performers include Minda Industries (+165 per cent), Delta Corp (+64 per cent), Sundaram Multi Pap (+55 per cent), Ramkrishna Forgings (+47 per cent), and Satin Creditcare (+36 per cent), the report adds.

The year has been dominated by financials, which accounts for 79 per cent of the total QIP issuances so far. While 64 per cent of the stocks have outperformed the benchmark index, there are seven scrips, which are trading at a discount to the issue price. They include Mercator (-17 per cent), AksharChem (-16 per cent), Dena Bank (-16 per cent), Federal Bank (-5 per cent), Nitin Spinners (-5 per cent), Bodal Chemicals (-3 per cent) and Bajaj Finance (-1 per cent) as per the report dated December 12, 2017.

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