7-fold jump in QIP fundraising

New Delhi: Fuelled by improved market sentiments and robust underlying demand, fundraising by issuing shares/units to institutional investors soared to Rs78,000 crore in 2023-24, a more than seven-fold surge year-on-year.

The 2024-25 fiscal is expected to be very robust as companies will continue to garner capital for capex post-election results.

“In an unprecedented era of economic development aided by pro-business reforms and macroeconomic stability, India is set to become the third largest economy globally by 2027 and will continue to see strong flows. In this backdrop, we expect FY25 to also very strong year from a primary capital perspective as companies will continue to look to raise capital for capex post-election results,” said Neha Agarwal, MD & Head of Equity Capital Markets at JM Financial Ltd.

Financial companies raise funds through qualified institutional placement (QIP) to meet their additional capital requirement buffer to support their growth plans and enhance their business. QIP is one of the quickest products to raise funds from institutional investors. It is designed for the 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. According to data compiled by Prime Database, fundraising through the QIP route reached Rs78,089 crore in 2023-24, which was way higher than Rs10,235 crore mopped up in the preceding financial year.

This included fund mobilisation by REITs and infrastructure investment trusts (InVITs) through the QIP mode. Before that, Rs28,532 crore was mobilised through the QIP route in 2021-22 and an all-time high of Rs81,731 crore in 2020-21. Of Rs78,089 crore collected in FY24, a total of Rs68,933 crore was raised by 55 companies through the route, remaining Rs9,156 crore was mopped up by one REIT and two InvITs.