Qualified Institutional Placement (QIP)

A Qualified Institutional Placement is a sale of securities by private placement to Qualified Institutional Buyers. Several jurisdictions have rules around how QIPs must be conducted and on what basis. The Securities and Exchange Board of India, for instance, introduced QIPs to make the country’s domestic capital markets more competitive and efficient. Under certain conditions, Indian listed companies can raise capital through placements of equity and convertibles to QIBs without SEBI registration. The conditions relate to the amount of capital raised in absolute terms and relative to the net worth of the company, allotment to end investors, how many can be sold in a given year etc and they must align with stock exchange rules.