Corporate India Capitalizes Mkt’s Upward Trajectory

New Delhi: Indian companies achieved a record-breaking fundraising of Rs1.33 lakh crore through Qualified Institutional Placements (QIPs) in FY25, registering a sharp increase from the previous year, as a booming stock market fuels aggressive capital raising. India Inc has raised Rs1,33,251 crore till March 31, marking an 87 per cent increase from Rs71,306 crore garnered in FY24, according to data compiled by Prime Database.

Companies leveraged buoyant equity markets to strengthen balance sheets and fund expansion, a key driver of the surge in QIP fundraising, analysts said. As per the data, 85 companies have tapped the capital markets with QIP issues till March 31, 2025, as compared with just 64 companies during the last financial year.

“FY25 witnessed the highest-ever QIP fundraising in the history of Indian capital markets, both in terms of volume and value,” said Neha Agarwal, MD & Head of Equity Capital Markets at JM Financial, told PTI.

Agarwal attributed the surge in QIPs to a broader trend of corporates strengthening their balance sheets through deleveraging, driven by buoyant capital markets.

“With equity emerging as the preferred avenue to raise capital, corporates are driving accelerated growth and expansions by leveraging both organic and inorganic opportunities,” she said.

QIP is one of the quickest products to raise funds from institutional investors. It is designed for listed firms and investment trusts, which allow them to mobilise funds quickly from institutional investors without the need to submit any pre-issue filings to market regulators.

Major contributors to the record-breaking QIP fundraising include conglomerate Vedanta Group and food delivery major Zomato, which raised as much as Rs8,500 crore each. They were followed by Adani Energy Solutions and Varun Beverages, which raised Rs8,373 crore and Rs7,500 crore, respectively.

Other significant QIP transactions during FY25 include Samvardhana Motherson International at Rs6,438 crore, Godrej Properties at Rs6,000 crore and Rs5,000 crore by Prestige Estates Projects. In addition, state-owned lender Punjab National Bank, Bank of Maharashtra, UCO Bank, Indian Overseas Bank, Central Bank of India, and Punjab & Sind Bank collectively raised capital more than Rs14,000 crore during the year. JSW Energy, Brookfield India Real Estate Trust, Torrent Power, and Bharat Forge were also among companies that raised capital through the QIP route to bolster their financial reserves. Meanwhile, JM Financial has maintained its leadership in managing QIPs during FY25. As of February, the firm ranked first in terms of the total number of issues, as it handled 15 QIP transactions that collectively raised Rs38,693 crore (approximately $4.5 billion), as per Prime Database. The momentum in QIP fundraising was particularly notable in deals exceeding Rs 250 crore. Funds raised through such large-scale QIPs increased from Rs24,900 crore in FY24 to Rs38,693 crore in FY25, marking a 55.4 per cent rise. “JM Financial secured the number one position in FY25 year-to-date in terms of QIP volumes in deals above Rs250 crore ($30 million), by successfully closing 15 QIP transactions that raised Rs 38,693 crore ($4.5 billion),” Agarwal added. Echoing similar sentiments, Vinod Nair, head of (research) at Geojit Investments, pointed out that the sustained growth of the Indian stock market from 2020 to 2024, culminated in a 40 per cent surge in the broad market during FY25, has created a strong foundation for the company’s fundraising.

Nair noted that promoters and companies have capitalised significantly on the market’s upward trajectory, leveraging increased valuations to raise substantial funds through share sales for promoter benefit. Additionally, the QIP was initiated to enhance the company’s capacity -- whether through greenfield or brownfield expansions, strategic acquisitions, or debt reduction. He further said, “QIPs have been observed across various sectors. However, they are expected to be more prevalent in manufacturing and emerging industries & technology industry. This trend is driven by the growth of India’s export-oriented industries and government initiatives like PLI schemes, which provide significant support to 14 sectors.” However, the outlook for QIP activity in the near-term appears cautious. Nair stated that the likelihood of increased QIP activity remains low due to the ongoing consolidation in the stock market, which has tempered the willingness of promoters and management to dilute equity at lower valuations. “Market corrections, beginning in the second half of FY25, have been driven by weaknesses in both global and domestic markets. This subdued market sentiment is expected to persist in the short to medium term, potentially restraining the growth of QIP issuances,” he added.