QIP loses flavour in 2008; dips 86%
Sunday, September 28, 2008 13:17 [IST]
New Delhi: India Inc's fund raising activity through institutional placement route has witnessed a
significant slump on account of adverse market conditions, with the total capital raised so far this year
declined by 86 per cent.
Funds raised through QIP route have reduced substantially to USD 530 million so far this year compared
with USD 5 billion in 2007,an year on year drop of 86 per cent on annualised basis, according to the latest
report of NEXGEN Capitals, the merchant banking arm of brokerage firm SMC Global Securities.
The decline in Qualified Institutional Placements (QIP) so far this year is largely due to adverse market
conditions. The fall is in line with the dip in equity markets, which are trading much below their all time
highs, NEXGEN Capitals Equity Head Jagannadham Thunuguntla said. So far this year only four
qualified institutional placements deals have been announced, while there were 29 deals in 2007.
Considering the global economic scenario and the bearish trend in the domestic as well as overseas
markets there is least possibility of any more QIP deals happening this year. The future of QIP deals
looks bleak for the near term, Thunuguntla added. There have been 49 QIP deals ever since the QIP
guidelines came into effect in May 2006. The year 2006 saw 16 such deals, in 2007 it was 29,while this
year there have been only four deals.
The total volume raised through QIPs from 2006 till date aggregated to USD 6.59 billion. The current
mark to market value of the same has fallen to USD 3.96 billion representing a negative return of 39.80
per cent, the report said.
Source : PTI