QIPs become chosen option
The Hindu Business Line, May 27, 2009, Page 10
Our Bureau, Mumbai
PTC India’s issue subscribed within 4 hours.
Qualified institutional placements (QIPs) are becoming popular means to raise funds for public listed companies.
Successful QIPs by some fund-starved real estate companies that took the lead have encouraged others like PTC India to tap this route. Unitech Ltd, DLF and Indiabulls Real Estate have raised more than Rs 8,000 crore through QIPs since mid April 2008.QIP guidelines were issued in May 2006 and the first QIP placement happened in September 2006. Since then 49 QIPs have hit the market (until December 2008), most of them in 2006 and 2007. Only four companies raised money through QIPs in 2008, according to a January 2009 report by SMC Capitals.
PTC India (earlier known as Power Trading Corporation) has successfully raised Rs 500 crore ($105 million) through a QIP offering at Rs 75 a share. It has been the only non-real estate company that did a QIP this year.
“The entire issue was fully subscribed within four hours of opening of the books on May 25, and was finally subscribed 2.4 times,” Kotak Mahindra Capital Company, the book running lead managers to the issue, said.
“The deal witnessed overwhelming response from both domestic and foreign investors with select mutual funds and long FIIs acting as cornerstone investors.”
The PTC board approved an offer of 6.66 crore shares at Rs 75 a piece aggregating to Rs 500 crore to qualified institutional buyers (QIBs).
PTC stock closed 4 per cent lower at Rs 86.20 on Tuesday.
This issue represents 22.67 per cent of PTC’s post issue share capital.
Unitech Ltd was the first listed company to raise funds through QIP this calendar year. It raised Rs 1,621 crore ($325 million) through a QIP in April. Earlier this month DLF raised Rs 3,860 crore by placing 9.9 per cent of the promoters’ stake before QIBs. Last week India Bulls Real Estate raised Rs 2,656 crore through the QIP route.
Some QIPS are in the pipeline too. Parsvnath has announced plans to raise Rs 2,500 crore and HDIL $600 million (over Rs 2,800 crore) through QIPs.
“QIPs have become popular of late as a convenient way of raising money for the listed companies compared to some other routes like rights issue where the process is much more time consuming and complicated,” an expert familiar with the subject said.
The Hindu Business Line, May 27, 2009, Page 10
Our Bureau, Mumbai
PTC India’s issue subscribed within 4 hours.
Qualified institutional placements (QIPs) are becoming popular means to raise funds for public listed companies.
Successful QIPs by some fund-starved real estate companies that took the lead have encouraged others like PTC India to tap this route. Unitech Ltd, DLF and Indiabulls Real Estate have raised more than Rs 8,000 crore through QIPs since mid April 2008.QIP guidelines were issued in May 2006 and the first QIP placement happened in September 2006. Since then 49 QIPs have hit the market (until December 2008), most of them in 2006 and 2007. Only four companies raised money through QIPs in 2008, according to a January 2009 report by SMC Capitals.
PTC India (earlier known as Power Trading Corporation) has successfully raised Rs 500 crore ($105 million) through a QIP offering at Rs 75 a share. It has been the only non-real estate company that did a QIP this year.
“The entire issue was fully subscribed within four hours of opening of the books on May 25, and was finally subscribed 2.4 times,” Kotak Mahindra Capital Company, the book running lead managers to the issue, said.
“The deal witnessed overwhelming response from both domestic and foreign investors with select mutual funds and long FIIs acting as cornerstone investors.”
The PTC board approved an offer of 6.66 crore shares at Rs 75 a piece aggregating to Rs 500 crore to qualified institutional buyers (QIBs).
PTC stock closed 4 per cent lower at Rs 86.20 on Tuesday.
This issue represents 22.67 per cent of PTC’s post issue share capital.
Unitech Ltd was the first listed company to raise funds through QIP this calendar year. It raised Rs 1,621 crore ($325 million) through a QIP in April. Earlier this month DLF raised Rs 3,860 crore by placing 9.9 per cent of the promoters’ stake before QIBs. Last week India Bulls Real Estate raised Rs 2,656 crore through the QIP route.
Some QIPS are in the pipeline too. Parsvnath has announced plans to raise Rs 2,500 crore and HDIL $600 million (over Rs 2,800 crore) through QIPs.
“QIPs have become popular of late as a convenient way of raising money for the listed companies compared to some other routes like rights issue where the process is much more time consuming and complicated,” an expert familiar with the subject said.
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