International Journal of Law and Legal Jurisprudence Studies

QUALIFIED INSTITUTIONAL PLACEMENT AND ITS IMPACT ON COMPANIES IN CURRENT TREND :Aditya Khandelwal Institute of Law Nirma University, Ahmedabad

 

ABSTRACT

The Qualified Institutional Placement (QIP) describe as significant tool for capital raising by companies in domestic market. While having significance in capital market, the current scenario is showing trends to declination and companies are not interested in coming with QIP. There are certain ambiguities like fixing price formula, no lock-in period and dilution of ownership etc lies with Securities and Exchange Board of India (SEBI) QIP scheme. It is necessary for removing these ambiguities from effective QIP process. But the motive behind this paper is to find out that what influences the companies to race for QIPs in current scenario and why wouldn’t they be following Initial Public Offer (IPO) route as they used to do previously? Furthermore this article going to deal with several provisions related to QIP as prescribed in the Chapter VIII of SEBI (Issues of Capital and Disclosure Requirements) Regulations, 2009 for the issuance through QIP. It also covers the area about the difference between the QIP scheme in India and U.S.A.to understands the current position of the QIP in Indian market. At the end while concluding it describes current trends related to QIP in India. 

1. INTRODUCTION

Every company needs capital for its expansion, development and diversification which acts as oxygen for a company. By several sources a company raises fund either in domestic or foreign capital market. Usually, the companies raise money in capital market by two sources either by taking debt or by issuing equity shares. Qualified Institutional Placement (QIP) is one of the means to raise money in the capital market through equity. In order to prevent listed companies in India from developing an excessive dependence on foreign capital, the Securities and Exchange Board of India (SEBI) introduced the QIP process through a circular issued on May 8, 2006.

QIP means allotment of eligible securities by a listed company to Qualified Institutional Buyers (QIBs) on private placement basis as mentioned in Chapter VIII Reg. 81 (b) of SEBI (Issues of Capital and Disclosure Requirements) Regulations, 2009. In broad terms, QIP can be simply defined as the method of raising money or funds from the market by issuing “eligible securities” include equity shares, fully and partly convertible debentures or any securities excluding warrants and non-convertible debt instruments along with warrants to QIBs by any listed company in India”[1].

In Indian public offerings, generally sixty percent of the offered shares are reserved for subscription from QIBs[2]. The QIP scheme was launch by SEBI in Chapter XIIIA of SEBI (Disclosure & Investor Protection) Guidelines, 2000 for the regulation of QIP which were later replaced by SEBI (Issues of Capital and Disclosure Requirements) Regulations, 2009. The key objective behind QIP is to maintain liquidity in Indian market and to motivate Indian companies to raise money from domestic market, instead of excessively dependence upon foreign capital[3].

 

Companies, who want to raise funds through QIP mode of SEBI, should be listed on an stock exchange and needs to issue minimum of 10% of the securities to mutual funds[4]. The QIP Scheme is open for investment by Qualified Institutional Buyers (QIBs) who are institutional investors, ready to invest in the capital market and these includes, public financial institutions, scheduled commercial banks, mutual funds, FIIs, provident funds, pension funds, venture capital funds, insurance companies, etc. The issue is managed by a SEBI-registered merchant banker[5].

Several companies like Mahindra Finance, Marico, Unitech & India Bulls, TATA Motors, Shriram Transport Finance Company, SBI, etc. have raised their capital post financial crisis period due to time saving and cost-effectiveness technique. But due to several ambiguities like provision for no lock-in period and increase of QIBs holding in companies which adversely affect over the other stakeholders it shows a path of declination for QIP scheme. In the year 2009 to circulate these ambiguities several merchant bankers request to ease QIP pricing norms which were rejected by SEBI[6].

1.1 REASON FOR INTRODUCTION OF QIP

In Pre Lehman era investors were highly concern about investment due to rapid growth in country’s economy with the GDP around 9.3%[7] approximately and they were used to invest through IPO instead of QIP route in capital market for the reason that investors were ready to take risks in the market[8]. But after the financial crisis the situation was changed due to fall in Lehman brothers and its associated companies which severs the investors trust upon the companies and the only path which was left with investor companies to raise the money from foreign markets.

Indian market regulators before innovation of QIP process had anxiety that Indian companies were accessing international funds via issuing securities such as American Depository Receipts (ADRs) and Global Depository Receipts (GDRs), due to several complexities for raising capital in the domestic markets. Therefore, SEBI introduced the QIP process in SEBI circular[9] with the reason to abandon the excessive dependence on foreign capital by listed companies in India as this led to undesirable export of the domestic equity market. The following kind of securities, which are convertible into or exchangeable with equity shares at a later date, can be issued under QIP[10]:

  • Equity shares
  • Fully convertible debentures
  • Partly convertible debentures
  • Non-convertible debentures (NCD) with warrants[11]
  • Any other securities (other than warrants)

Securities which are convertible into or exchangeable with equity shares at a later date may be converted/exchanged into equity shares at any time within 60 months after the date of allotment. The main logic behind using this tool was that it is easy to convince couple of big investors like QIBs than the whole public which involves a huge cost as well for advertisements, etc.

 

 

 

 

 

 

 

 

2. QIP RULES AND REGULATION

Under Chapter VIII of SEBI (Issues of Capital and Disclosure Requirement) Regulations, 2009 SEBI laid down certain guidelines for issuance through QIP mode, which has to be complied by company strictly for the issuance through QIP route.

2.1 QIP PROCESS AND PROCEDURAL REQUIREMENT

For issuance through QIP route companies need to fulfill certain conditions and are required to comply with the detailed procedure which is prescribed in SEBI (Issues of Capital and Disclosure Requirements) Regulations, 2009[12].

2.1.1 APPLICABILITY

Issue of securities through QIP mode is available only to the listed public companies which fulfills the conditions that, equity shares of the same class are already listed on a stock exchange having nationwide trading terminals for a period of at least 1 year as on the date of issuance of notice to its shareholders for convening the meeting of its Board of Directors/Committee of Directors authorised by the Board to decide on the opening of the proposed QIP issue and it is in compliance with the prescribed minimum public shareholding requirements of the listing agreement[13]. A company is required to allot minimum 10 percent of securities to be issued to mutual funds[14], but if in the case no mutual fund is agrees to subscribe minimum requirement of 10 percent or part thereof, such minimum portion or part thereof may be allotted to other QIBs[15].

QUALIFIED INSTITUTIONAL BUYER’s

QIBs are large investors in the market to whom large portion of securities are issued instead of inviting application for issuance of securities from the public. QIBs shall not be promoters of Issuer Company or relatives of promoters, “Promoter” means the persons who are in the control of Issuer or the persons who are involved in the formulation of an arrangement pursuant to which specified securities are offered to public or persons named in the offer document as promoters. A financial institution, scheduled bank and foreign institutional investor who approach the issuer company which is its subsidiary company or mutual fund/company promoted by it shall be treated as ‘promoter’ which would include[16]:

(i)              Person having rights under shareholders or listing agreement entered into with promoter/relatives of promoter;

(ii)            Veto rights;

(iii)          Rights to appoint nominee directors on board of issuer.

A QIB can be a mutual fund, venture capital fund and foreign venture capital investor registered with the Board or a foreign institutional investor and sub-account (other than a sub-account which is a foreign corporate or foreign individual), registered with the Board or a public financial institution as defined in section 4A of the Companies Act, 1956 or a scheduled commercial bank or a multilateral and bilateral development financial institution or a state industrial development corporation or an insurance company registered with the Insurance Regulatory and Development Authority or a provident fund with minimum corpus of twenty five crore rupees or a pension fund with minimum corpus of twenty five crore rupees or National Investment Fund set up by resolution no. F. No. 2/3/2005-DDII dated November 23, 2005 of the Government of India published in the Gazette of India or insurance funds set up and managed by army, navy or air force of the Union of India[17].

 

 

 

2.1.2 CONDITIONS FOR QUALIFIED INSTITUTTIONAL PLACEMENT

The listed issuer company has to pass a special resolution by its shareholders approving the QIP for issuance of equity shares through QIP mode[18]. In furtherance same class of shares that has to be allotted through the QIP or pursuant to conversion or exchange of eligible securities offered through the QIP, have been listed on the recognized stock exchange having nationwide trading terminal for a period of at least one year prior to the date of the issuance of notice to its shareholders for convening the meeting to pass the special resolution.

It is further provided that where the issuer is a transferee company in scheme of merger, demerger, amalgamation or arrangement sanctioned by the High Court under section 391 to 394 of the Companies Act, 1956, makes QIP, the period for which equity shares of the same class of the transferor-company were listed on the stock exchange having nationwide trading terminals shall also be considered for the purpose of computation of the period of one year[19]. All these must be in compliance with the requirement of minimum public shareholding specified in the Securities Contracts (Regulations) Rules, 1957[20].

 

2.1.3 MINIMUM NUMBER OF ALLOTTEE

It is also mandatory for the Issuer company to ensure that the minimum number of allottees for each placement made under QIP issue is not less than as per Reg. 87 (1) (a) & (b) of SEBI (Issues of Capital and Disclosure Requirements) Regulations, 2009:

  • Two, where the issue size is less than or equal to rupees 250 crore.
  • Five, where the issue size is greater than 250 rupees crore.

Also, no single allottee can be allotted more than 50 per cent of the issue size.

 

2.1.4 PRICING

A floor price has been set by the SEBI for the companies opting QIP scheme. As per  the regulations, issue of securities shall be made at a price not less than the average of the weekly high and low of the closing prices of the related shares quoted on the stock exchange during the 2 weeks preceding the date of the meeting in which the board of the company or the committee of directors, duly authorised by the Board of the company to decides upon the opening of proposed issue[21].

This SEBI mandated floor price may come in the way of closing some QIP deals, which do not comply with the duly process. Valuation of QIP scheme is key concern for an investor while evaluating whether to participate or not, and for this reason many companies faces a problem when their current market price is lower than the floor due to which QIBs shows unwillingness to invest to bear the loss from beginning. Even after radical rise in the prices of shares of a company which encourages the QIBs it complicates the matter, as merchant bankers several times has done lobbying for the QIBs to give more flexibility while pricing QIPs. After seeing this ambiguous pricing scheme the constant conduct of SEBI is unlikely to change to alter the pricing norms in future. But if in the case position of a company is sound then investors would not hesitate in investing even at a SEBI mandated floor price, despite the volatility of the shares in a reviving market[22]. The securities which are convertible into or exchangeable with equity shares at a later date are issued; the price of resulting equity shares is to be determined in the same manner[23][24].

2.1.5 RESTRICTION ON AMOUNT RAISED

The total aggregate of amount which an Issuer company would raise through all proposed placement and all previous placements made in the same financial year shall not exceed 5 times the net worth of the issuer company, as per the audited balance sheet of the previous financial year[25]. A limitation is also imposed upon QIBs that for a period of 1 year from the date of allotment of securities to them, they cannot sell the allotted securities expect on a recognized stock exchange[26]. A recognized stock exchange means any stock exchange which has been granted recognition under section 4 of the Securities Contracts (Regulation) Act, 1956.

2.1.6 SHAREHOLDER’S RESOLUTION

A special resolution shall be passed by the shareholders of a company at the general meeting to offer securities to QIBs through QIP route. This special resolution shall specify that allotment is proposed to be made through QIP and shall also specify the related date on the basis of which price of the securities shall be determined. In compliance of it allotment of securities issued has to be completed within 12 months from the date of passing of the special resolution[27].  If the company proposes to make multiple placements, then the placements made pursuant to same shareholders’ resolution shall provide a gap of atleast 6 months between each placement[28].

There must be a placement document which shall contain all material information, including the information specified in SEBI (Issues and Disclosure Requirements) Regulations, 2009 on basis of which securities are to be issued on and there is no need for pre-issue filing of the placement document with SEBI for a company making QIP.

A placement document of QIP is a private document which provides the selected investors through serially numbered copies. A copy is also placed on the website of the concerned stock exchange and of the issuer with an proper disclaimer to the effect that it is in connection with an issue to Qualified Institutional Buyers and that no offer is being made to the public or to any other category of investors[29]. The company is only required to file a copy of the placement document with SEBI for record purposes within 30 days of the allotment of securities[30].

2.1.7 MERCHANT BANKERS

The issue and allotment through QIP mode is managed by the Merchant Bankers registered with SEBI who are required to furnish a due diligence certificate, stating that the issue is being made and complies with Issue of Capital and Disclosure Regulations Guidelines, along with the application made for seeking in-principle approval for listing of the proposed securities to each stock exchange on which the same class of shares or other securities are listed and that the issuer complies with the all requirements as per regulations of SEBI (Issues and Disclosure Requirements) Regulations, 2009[31]. The Merchant Bankers have to file a copy of the placement document and post issue details with SEBI within 30 days of the allotment, for record purpose.

3. QIP REGUALTION IN INDIA AND UNITED STATE OF AMERICA (U.S.A)

Issuing of securities through QIP route in U.S.A is regulated through Rule 144A of Securities Act, 1933[32]  with intent to ensure that buyers of securities receive complete & accurate information before they invest and issuers may also target private placements of securities to QIBs. Securities Act, 1933 provides numeral of exemptions from the requirement of registering securities with United State- Securities & Exchange Commission (SEC). The United State SEC approved the said rule in April 1990 that allowed for the immediate resale of private placements among QIBs and through which large financial institutions could sell previously acquired private placements without registration or to hold the securities for two years. Through creation of registration requirement for the purchasers of 144A securities, the SEC wanted to reduce regulatory costs and create a liquid market for these restricted securities[33].

QIBs are defined under Rule 144A as having investment discretion of at least $100 million and include institutions such as insurance agencies, investment companies, banks, etc. As a technical matter the transactions under Rule 144A actually involves the initial sale of securities to underwriter by issuer and then reselling from the underwriters to the QIBs. This rule also aims to make the US private placement market more attractive to foreign issuers who may not wish to make more onerous direct US listings[34].

3.1 DIFFERENCES ON QIP REGULATION BETWEEN U.S.A AND INDIA

There are some key difference between the Qualified Institutional Placement process between U.S.A and India. These are:

  • First, there is a difference between issuing process of QIP in both legal system. In India, as according to SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 the placement directly allotted to allotee, while in case of USA transactions must actually involve an initial sale from the issuer company to the underwriter and then a resale from the underwriters to the QIBs. So in USA QIP process the Company issue QIB through underwriter which is reissued to QIBs[35].
  • Second, both legal system targets different audience. The US SEC regulations targets to encourage & attract foreign companies to invest in US stock exchange while in India, the purpose behind QIP is to promote domestic issuer to undertake domestic private placement which prevents the listed companies in India from developing an excessive dependence on foreign capital like ADR/GDR. These companies may without submitting any pre-issue filling to the regulator allowed to raise capital from its domestic markets[36].

The fundamental objective of both regulations under Rule a 144Aof SEC and SEBI QIP guidelines is to encourages/promote private placement in their respective domestic market.

4. CURRENT TRENDS ON QIP AND ISSUES INVOLVED

SEBI introduced QIP route on March 28, 2006 through issuance of circular[37]. The main purpose behind using this tool was that it is easier to convince couple of big investors like QIBs than the whole public which involves huge expenses like advertisements, appointment of underwriter etc. The present trends shows that most of the Real Estate companies came up with the QIPs as they suffered most due to crisis (subprime mortgage crisis) e.g., Marico in year 2006 has raised Rs. 150 crore through QIP route which became the first player in the FMCG sector. In 2007 Public sector lender Bank of India raised Rs. 3.77 crore by QIP. In 2008 Karnataka Bank raised Rs. 240 crore through QIP. Unitech in year 2009 raised $ 325 million through QIP and Texmaco raised Rs. 179.56 through QIP, HCL Infosystems opens Rs 500 crore and was the successful one in doing that which was followed by Shobha developers who raised Rs. 526.89 Crores, etc. After reviewing this trend other non real estate companies also came with QIP like Suzlon energy came up with Rs. 2000 Crore, Shree Renuka Sugars with QIP of $ 105 respectively. TATA Motors in 2010 also hike the size of QIP to $750 million from $525 million, Sintex Industries in year 2012 raised the QIP upto Rs. 200 crore. Shriram Transport Finance Company raised Rs. 583.86 crore through QIP, Shopper’s Stop raised Rs. 130 crore through QIP.  Various companies raises funds through QIP for various reasons e.g., Shree Renuka raised funds to expand the company’s refining capacity, Tech Mahindra raised it to retire its debt and various companies also raises funds to meet their diversified needs based on their nature of business and kind of operations they are in[38].

ADVANTAGES OF QIP

  1. Less tedious process – QIP is flexible mechanism evolved for private placement of securities with QIBs and is not subject to the tedious provisions such as lock-in period, tight time schedule, etc. for the issuance of other securities.  Qualified Institutional Buyers can be raised within short span of time rather than in IPO, Right Issue takes long process. It also provides an opportunity to buy non-locking shares and is an easy mechanism if corporate governance and other required parameters are in place.
  2. Cost-efficient: Difference of cost in terms of various legal expenses, as there is an entire process of listing overseas securities a huge cost is involved and it is also easier to get listed on domestic markets like Bombay Stock Exchange/National Stock Exchange instead of listing on for a say Luxembourg or a Singapore foreign markets.
  3. Proper checks and balances: The QIP norms contain proper checks and balances viz., minimum number of allottees depending upon the size of the QIP, pricing norms, appointment of merchant banker, prohibition of withdrawal of bids, mandatory participation of mutual funds, disclosure through placement document, etc.
  4. A competitive alternative funding structure: With no lock-in, liberal time-frames, less disclosures and flexible approach, QIP appears to be an effective mechanism to raise funds through private placement of securities with QIBs. On almost all the major counts, the private placement under QIP is better or on par with the Euro Issues. With this, private placement in India is expected to become equally attractive and a sizeable corporate fund raising is expected to be through QIP.

After few successful QIPs like that of Unitech & Indiabulls real estate, every second company started issuing QIP to raise money either to meet their working capital needs or to retire their debt, these issues started declining.

TURMOIL WITH QIP SCHEME

The pricing method of QIP issues by SEBI is one of the major reasons for its declination.  According to SEBI guidelines, the price of issues should not less than the higher of the following[39]:

  • The average of the weekly high and low of the closing prices of the related shares quoted on the stock exchange during the six months preceding the relevant date.
  • The average of the weekly high and low of the closing prices of the related shares quoted on the stock exchange during the two weeks preceding the relevant date.

 

SEBI in August 2008 has changed the pricing formula, allowing it to be based on the two week average share price, so that companies could price the issue as close to the market price as possible[40]. But in July 2009, SEBI rejected the plea of investor banker to ease in QIP pricing formula by the alteration of formula and to take the current market price as the base, as the two-week average price worked out to be higher than the current market price in case of most companies. QIP investors had been demanding a steep discount to the current market price[41] which also rejected by SEBI. Some senior officials of SEBI states that the regulators has rejected the proposal on ground that the Indian market is still not prepared for such flexibility in pricing by providing  a logic that the SEBI formula is to prevent companies from issuing shares at a discount to friendly investors[42].

QIPs could also be dangerous for allowing an investor to buy majority stocks in the company which leads to dilution of control and ownership of the company which results loss in a company. It could give an easy entry for the competitor and increases the takeover implications as there is no lock- in period for Qualified Institutional Buyer for holding shares[43].

One of the declinations reported in the newspaper on 27 July 2013 that:

“Fund raising by Indian companies through issue of shares to institutional investors declined by 65% to Rs.387 crore in April over the previous month. According to the latest data available with the market regulator Securities and Exchange Board of India (Sebi), companies raised Rs.387 crore through the qualified institutional placement (QIP) route in April, a slump from Rs.1,110 crore mopped up in March. QIP is a capital raising tool whereby a listed firm can issue equity shares, fully and partly convertible debentures, or other securities that are convertible to equity shares to institutional investors. “During April 2013, there were four QIP issues worth Rs.386.6 crore in the market as compared to two QIP issues worth Rs.1,110.1 crore in March 2013,” the Sebi data shows. Market experts said that fund raising through QIPs has slowed down in April due to volatile market conditions. “Most investors were reluctant to participate in QIPs since shares of many companies that made placements to institutional investors were trading below the issue price. Now, we are witnessing a renewed interest from investors, though a lot would depend on valuations,” an expert said. Meanwhile, the BSE’s benchmark Sensex surged 668 points, or 3.5%, during April. In 2012-13, firms garnered nearly Rs.16,000 crore through issuance of shares to institutional investors against Rs.2,163 crore garnered through QIPs in the previous fiscal. The experts had attributed the seven-fold growth to the revival in the stock market’s fortunes. In 2010-11, Indian firms garnered Rs.25,850 crore cumulatively through 59 issues via QIP route[44].”

But recently State Bank of India and IDBI Bank, Indian Overseas Bank, Dena Bank and Allahabad Bank collectively lined up to raise Rs. 15000 crore in December 2013. In 2014 SBI raises Rs. 8,032 crore through QIP with the aid of LIC as largest institutional placement in country[45]. Allahabad Bank after got the approval of its shareholders in December 2013 raised QIP of Rs. 400 crore.

There also exists a serious error on the part of SEBI which shows an element of discrimination against the companies listed on Regional Stock Exchanges (RSEs) or even against those companies whose securities are being traded on BSE Index.  According to SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 any issue of equity shares, fully convertible debentures and partly convertible debentures can be made into Qualified Institutional Buyers by a listed company which fulfils the two conditions, namely:

(a) Equity shares of the same class are listed on a stock exchange having nation-wide trading terminals, and

(b) It is in compliance with the prescribed minimum public shareholding requirements of the listing agreement.

As per the condition (a) above, the securities of the issuer must be listed on either BSE or NSE, which means that all those companies whose securities are listed only on RSEs shall be disqualified. This shows no rationality to deprive those companies listed on RSEs from making QIP if they are in compliance with the prescribed minimum public shareholding requirements and the proposed issue is being made with the approval of shareholders under section 81 (1A) of the Companies Act, 1956. When these companies can issue securities through by way of preferential allotment or tap the foreign market by issue of ADRs/GDRs/FCCB, then why these companies are not allowed to raise through QIP route.

 


CONCLUSION

 

The Qualified Institutional Placement is one of the sources where companies can raise capital.  In general trends, the purpose for issuing QIP is to retire debt. The QIP process have many benefit for company like it is easy to extent, have no long documentary process with SEBI which saves time of a company and also there is no lock-in period for investor. Although the company have benefits avail from the QIP, but some extent it creates some difficulties also. It dilutes the stake of existing shareholders. Hence, QIPs are made by companies with significant promoter holding; promoters with low stakes are reluctant to adopt this route, as a further dilution could mean risking the management control of the company. Also other problems as mention with its pricing formula as well as unlisted company are not allowed for QIP, as well as the SEBI data also shows the continues declination in QIP investment in year by year and monthly declination in year 2013. But in initial months of year 2014 and in last month of 2013 QIP route is adopted by many companies like State Bank of India and IDBI Bank, Indian Overseas Bank, Dena Bank and Allahabad Bank collectively lined up to raise Rs. 15000 crore in December 2013 and in January 2014 SBI raises Rs. 8,032 crore through QIP with the aid of LIC as largest institutional placement in country. So it’s a kind of bootstrap where, while coming over from a particular problematic situation company enters another possible problematic condition.

So, in authors view there is need for removing these ambiguities from the QIP process. Author’s suggestions on QIP ambiguities are –

  • The major problem for company to come up with Qualified Institutional Placement is lies with the no provision of Lock-in Period. If company not doing well, the Qualified Institutional Buyer sell their ownership to another company or rival company which grow the chance of acquisition. So there is need for fixing Lock-in period for QIB shareholders.
  • Another suggestion on fixing on pricing formula. Although SEBI change the price fixing formula in 2008, but the current scenario has changed. There is need for fixing price of issues as according to current market situation, not on the basis of two week average share price.
  • Another suggestion on Qualified Institutional Placement ambiguities with regard to unlisted companies are not allowed to issue QIP. These unlisted company when  can issue securities by way of preferential allotment or tap the foreign market by issue of ADRs/GDRs, why should it be not allowed to raise funds through QIP by approaching the QIBs. So these companies which are listed in regional stock exchange can be allowed to issue QIP.

So in authors view there is need for SEBI removal of all these ambiguities lies with QIP process. Despite all the negativities present with QIPs, it is the most favorable and cost saving tool for raising money primarily in Indian markets for the companies during the low investors confidence or financial crisis. Companies who have strong fundamentals, sound corporate governance and good underlying assets have better ability to tap the QIP market.

 

 

 

 

 

 

 

 

 

 

 

 

 

[1] SEBI (Issues of Capital and Disclosure Requirements) Regulations, 2009, § 81 (a) and Social Science Research Network. 2010.  “The Qualified Institutional Placement (QIP): the flavor of Indian Corporate world in 2009 season,” Accessed April 19, 2012. http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1754369 .

[2] Securities Contracts (Regulations) Rules, 1957, § 19(2)(b).

[3]CA Agarwal, Uttam. 2009. “Qualified Institutional Placements.”  CA Uttam Agarwal Pirvate Limited, October 18. Accessed September 3, 2010.  http://www.uttamcorporate.com/resources/qip.pdf.

[4] SEBI (Issues of Capital and Disclosure Requirements) Regulations, 2009, § 86(1)(a).

[5] SEBI (Issues of Capital and Disclosure Requirements) Regulations, 2009, § 2(zd) and Agarwal 2009, 2.

[6] Agarwal 2009.

[7] Government of India. Ministry of Finance (MOF). 2010. Economic Survey 2009–10.  Accessed June 21, 2013. http://finmin.nic.in.

[8]Agarwal 2009.

[9] India. Securities and Exchange Board of India, 2006. “SEBI circular on QIP (2006),” Accessed May 9, 2013. http://www.sebi.gov.in/circulars/2006/dipcir0506.html.

[10] SEBI (Issues of Capital and Disclosure Requirements) Regulations, 2009, § 81(1).

[11]Where the specified security is NCD with warrant, an investor can subscribe to the combined offering of NCDs with warrants or to the individual instruments, i.e., either NCDs or warrants.

[12] India. SEBI 2006.

[13] Public shareholding under the listing agreement is of at least 25 per cent (10 per cent minimum public share holding has also been specified for few companies, which meet the criteria as laid down in the guidelines).

[14]SEBI (Issues of Capital and Disclosure Requirements) Regulations, 2009, § 86(1).

[15]Jayshree Navin Chandra and Shilpy Chaturvedi. 2009. “Return of QIP’: Quick Mode of Tapping Capital,”  Halsbury’s Law Monthly 3(1): 3. Accessed February 26, 2012. http://www.halsburys.in/jayshree-navin-debrief.html.

[16] JurisOnline.in. 2013.“Qualified Institutional Placement.” Accessed April 19, 2010. http://jurisonline.in/?p=22659.

[17] SEBI (Issues of Capital and Disclosure Requirements) Regulations, 2009, § 2(zd).

[18] SEBI (Issues of Capital and Disclosure Requirements) Regulations, 2009, § 82(a).

[19] SEBI (Issues of Capital and Disclosure Requirements) Regulations, 2009, § 82(b).

[20] SEBI (Issues of Capital and Disclosure Requirements) Regulations, 2009, § 82(c).

[21] SEBI (Issues of Capital and Disclosure Requirements) Regulations, 2009, § 85(1).

[22] Agarwal 2009.

[23]Ibid.

[24] SEBI (Issues of Capital and Disclosure Requirements) Regulations, 2009, § 85(2).

[25] SEBI (Issues of Capital and Disclosure Requirements) Regulations, 2009, § 89.

[26] SEBI (Issues of Capital and Disclosure Requirements) Regulations, 2009, § 91.

[27] SEBI (Issues of Capital and Disclosure Requirements) Regulations, 2009, § 88(1).

[28] SEBI (Issues of Capital and Disclosure Requirements) Regulations, 2009, § 88(2) & Chandra and Chaturvedi. 2009, 3.

[29] SEBI (Issues of Capital and Disclosure Requirements) Regulations, 2009, § 84(4).

[30] SEBI (Issues of Capital and Disclosure Requirements) Regulations, 2009, § 84(5) & Chandra and Chaturvedi. 2009, 3.

[31] SEBI (Issues of Capital and Disclosure Requirements) Regulations, 2009, § 83.

[32]Rule 144 provides an exemption and permits the public resale of restricted or control securities if a number of conditions are met, including how long the securities are held, the way in which they are sold, and the amount that can be sold at any one time. But even if you’ve met the conditions of the rule, you can’t sell your restricted securities to the public until you’ve gotten a transfer agent to remove the legend available at http://www.sec.gov/answers/rule144.htm.

[33] Susan Chaplinsky, “The Impact of SEC Rule 144A on Corporate Debt Issuance by International Firms,”Faculty of Daren Virginia Education, http://www.faculty.darden.virginia.edu (accessed April 16, 2005).

[34] Ibid., 3.

[35]CA Alley.com. 2009. “Qualified Institutional Placement.” Accessed July, 2012. http://www.caalley.com/art/cas09_0711.html.

[36] Ibid.

[37] India. SEBI 2006.

[38] Agarwal 2009.

[39] SEBI (Issues of Capital and Disclosure Requirements) Regulations, 2009, § 88(2) & 85(1).

[40] Loona, RS. 2007.  “SEBI needs to review QIP rules.” Economics times- India times, August 24. Accessed January 12, 2013. articles.economictimes.indiatimes.com.

[41] Ibid.

[42]Ibid.

[43]Chandra and Chaturvedi. 2009, 3.

[44] “QIP Fund Raising SEBI Shares Markets,” 2013. LIVEMINT | HINDUSTAN TIMES | LIVEHINDUSTAN, June 12. Accessed July 23, 2013. http://www.livemint.com/Money/DEqKok5XW1PNXMU9utBGbI/Fund-raising-through-QIP-declines-65-in-April-Sebi.html.

[45] “SBI raises Rs. 8,032 crore in country’s biggest QIP issue.” The Economic Times, January 30, 2014. Accessed February 27, 2014. http://economictimes.indiatimes.com/personalfinance/personalfinance/837555174.cms.

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