Leading automotive supplier Suprajit Engineering has raised Rs 150 crore (around $21.8 million) through a qualified institutional placement (QIP) amidst the turmoil in the markets, indicating that quality papers from performing companies have great demand from high net worth investors and fund houses.
Chakan-based Suprajit Engineering is the industry leader in design and manufacturing of a wide range of control cables for car, two/three-wheeler companies as well as non-automotive companies.
The QIP market has been down and the Suprajit issue is one of the first to have concluded successfully in the new year.
The only other firm to raise funds through QIP this year was micro-lender Ujjivan Financial Services, which raised Rs 300 crore earlier this week.
City-based JM Financial was the sole advisor for the Suprajit transaction, which is the first QIP issue from a non-financial company in 2016 so far.
Both the company and the i-banker refused to comment, saying the issue is yet to be formally closed.
Suprajit shares closed 1.35 per cent down at Rs 139.10 on the BSE on Friday (February19), while the benchmark index gained 60 points after weeks of rout.
The Sensex has lost over 12 per cent since the beginning of the year, and is down more than 23 per cent from its March, 2015 peak of 30,028.
According to Sebi data, fund mop-up via QIP nosedived 58 per cent to a little over Rs 1,600 crore in the December quarter of the fiscal, down from Rs 4,123 crore a year ago.
The funds mobilised by companies through QIP issues rose to Rs 1,288 crore in December from Rs 409 crore in the preceding month.
During the first nine months of 2015-16, the highest fund mobilisation was seen in July at Rs 4,824 crore, followed by September at Rs 4,338 crore. August saw the lowest fund mobilisation at Rs 231 crore, while October had no QIP issues at all.
In terms of numbers, four issues were witnessed during the period under review, as compared to 17 issues in the corresponding quarter.
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 for institutional investors.