20 Asian Legal Business | January-February 2025 preference for sophisticated investors, make QIPs the most preferred route, explains Arka Mookerjee, a capital markets-focused equity partner at JSA Advocates & Solicitors. Think of a QIP as a fast-track lane for listed companies to raise money. While traditional methods like rights issues or follow-on public offers can drag on for six to nine months, a QIP can wrap up in as little as six weeks. For companies eager to strike while the iron is hot, that’s a game-changer. This speed is coupled with a strong yet straightforward regulatory framework governing QIP issuances, which “gives comfort to an incoming investor that the fundraising programme is meticulous and has the integrity of best market practises,” Mookerjee says. But speed isn’t the only draw. Issues are allowed to handpick investors, allowing them to onboard longonly funds and offer significant share allocations—a key consideration for large investors, observes Lahoty. The ability to select from high-quality investors such as mutual funds, FPIs, FIIs, PFIs, sovereign funds offer added advantages in terms of valuation stability and building quality capital tables. Capital markets through capital expenditure or strategic acquisitions. “India is currently witnessing a revival of private capex cycle as also bullish capital markets. This gives an opportunity to Indian businesses to strengthen their balance sheets and prepare for the next phase of growth,” observes Manan Lahoty, head of Cyril Amarchand Mangaldas’ capital markets practice. He adds, “There has been an increase in the number of block deals – which is an indicator of market appetite for large transactions. All these factors have encouraged listed companies to return to the market.” The availability of abundant liquidity coupled with a strong secondaries market also fuelled the QIP rage, notes Milind Jha, head of capital markets at Dentons Link Legal, global law firm Dentons’ India alliance firm. QIP appeal While public companies have several fundraising routes, such as a rights issue or a further public offer, QIPs have emerged as the clear winner in 2024, legal experts say. Speed and simplicity, combined with exclusivity, regulatory safeguards and India’s QIP Boom Buoyant market conditions, an abundance of liquidity, and a need for rapid and selective fundraising saw qualified institutional placements emerge as the financing tool of choice for listed companies in 2024. The trend is likely to continue into 2025, despite slowing market conditions, experts say. By Nimitt Dixit When Kaynes Technology, an IoT-enabled Indian integrated electronics manufacturer, recently announced plans to raise $185 million, it joined a growing wave of companies turning to what has become one of corporate India’s favourite fundraising tools: Qualified institutional placements, or QIPs. In 2024, Indian companies raised a whopping $16 billion through these specialised issues, more than doubling 2023’s figure of $6 billion. The number of deals also surged from 45 to 95, according to Prime Database, marking a watershed year for this increasingly popular financing route. With general elections in the rearview mirror and corporate earnings showing reasonable growth in the first two quarters, companies seized the moment to beef up their balance sheets and fund strategic expansion plans either • QIP fundraising doubled to $16 billion in 2024 • Speed and selective investor choice drive QIP popularity • Market volatility expected in 2025, but QIP momentum likely to continue “India is currently witnessing a revival of private capex cycle as also bullish capital markets. This gives an opportunity to Indian businesses to strengthen their balance sheets and prepare for the next phase of growth.” — Manan Lahoty, Cyril Amarchand Mangaldas
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