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Qualified Institutional Placement (QIP)
Why is it in news?
- The ICICI Bank has recently completed the allotment of equity shares under its qualified institutional placement (QIP).
- It raised about ₹15,000 crore to fund its business growth and meet regulatory capital requirement.
- The other lenders, including HDFC, Axis Bank and Kotak Mahindra Bank have also raised capital as the system braces for a loan impairment impact due to the COVID-19 crisis.
What is Qualified Institutional Placement (QIP)?
- It is the means whereby a listed company can 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).
- QIP allows an Indian-listed company to raise capital from domestic markets without the need to submit any pre-issue filings to market regulators.
- SEBI had brought QIP to avoid the dependence of companies on foreign capital resources.