A Qualified Institutional Placement (QIP) is a capital raising mechanism that allows listed Indian companies to issue equity shares, fully convertible debentures, or other securities to Qualified Institutional Buyers (QIBs) — such as mutual funds, insurance companies, foreign portfolio investors, and venture capital funds — without undergoing the lengthy regulatory process required for a public issue. Introduced by SEBI in 2006 to provide a faster and more flexible route for listed companies to raise growth capital from domestic institutional investors, QIPs must be priced at or above a floor price derived from a two-week average of the traded price. At least 10% of the issue must be allotted to mutual funds and the allotment cannot be made to promoters or related parties. QIPs are extensively used by Indian banks, infrastructure companies, and mid-cap firms as a swift mechanism to raise equity capital during favourable market conditions.
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