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Thursday, January 21, 2010

India Inc raises Rs 42,000 cr via QIPs this fiscal

The fund mobilisation through Qualified Institutional Placements (QIPs) are back on track once again with five companies - Yes Bank, Karnataka Bank, Electrosteel Castings, HDIL and Shriram Transport Finance proposed to mobilise Rs 4,720 crore. Usha Martin closed its QIP issue on Monday, mobilised Rs 468 crore at price of Rs 85.90 per share. The stock is currently trading at Rs 91.30 on BSE. Karnataka Bank, Yes Bank and Shriram Transport Finance opened QIP booths last night.

Karnataka Bank fixed floor price of Rs 132.75 for its Rs 500 crore QIP issue in its board meeting held on Wednesday, January 20. The company will use the QIP proceeds to enhance the capital adequacy ratio. The stock is currently trading at Rs 137.45 on BSE. Yes Bank fixed its floor price at Rs 269.46, is currently trading at Rs 264.80 and Shriram Transport Finance is currently trading at Rs 510.95 against its floor price of Rs 501 per share on BSE.

HDIL is proposed to raise Rs 2,070 crore, Yes Bank Rs 1,140 crore and Shriram Transport Finance Rs 1,000 crore, collectively they will be raising Rs 4,210 crore through QIP route. Electrosteel Castings proposed to raise Rs 600 crore composite QIP issue consists of placement of equity shares and non-convertible debentures (NCDs) with warrants.

All these is happening after a gap of two months i.e Indian companies are raising funds from institutional investors through QIPs. In December 2009, four companies collectively raised Rs 594 crore via this route, as compared to more than Rs 4,500 crore mobilised between July and November 2009. So far in current financial year 2010, fifty-three companies collectively raised Rs 42,045 crore, against just two firms mobilised Rs 189 crore in FY2009 via QIPs.

The Bombay Stock Exchange (BSE) Sensex, has appreciated by 80 per cent in current financial year 2010, as compared to 38 per cent fall reported in previous financial year 2009.

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