Tuesday, August 11, 2020

Indigo’s Parent Company Approves ₹ 4,000 Cr Fundraise Via QIP

InterGlobe Aviation Ltd, the operator of India’s largest domestic carrier IndiGo, said on August 10 that it will raise up to Rs 4,000 crore via qualified institutional placement. The move comes as the company looks to manage cash during the COVID-19 pandemic which has hit its operations.
Qualified Institutional Placement is simply the means whereby a listed company can issue equity shares, fully and partly convertible debentures, or any securities other than warrants which are convertible to equity shares allotted to a Qualified Institutional Buyer (QIB).

This is the only other speedy method of the private placement, apart from preferential allotment whereby a listed company can issue shares or convertible securities to a select group of persons. QIP tops the other methods because the issuing firm does not have to undergo elaborate procedural requirements to raise this capital.
There was a growing concern from Indian regulators Before the QIP, that its domestic companies were accessing international funding too readily via American depository receipts (ADRs), foreign currency convertible bonds (FCCBs) and global depository receipts (GDR), instead of Indian-based capital sources. The sole purpose of QIP was to encourage Indian companies to raise funds domestically instead of tapping into overseas markets.
11/08/20 Arbaz Khan/Indian Wire
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