QIP meaning in simple words: quick money from big investors
QIP: (qualified institutions placement) is a quick way for a listed company to raise money by selling new shares only to big institutional investors, such as mutual funds and insurers.
The story
two people, one chai stall
A "what if" for FY27. Sameer wants ₹50 crore for a big expansion, and he wants it fast.
SameerA rights issue means writing to every shareholder. Is there a quicker way?
RiyaA QIP, a qualified institutions placement. We sell new shares only to big investors: mutual funds, insurers, banks.
SameerNot to my uncle?
RiyaNot to your uncle, and not to you either. Promoters can't buy in a QIP.
SameerAt what price?
RiyaA formula sets the floor: roughly the average price over the last two weeks. We can go up to 5% below it. Say about ₹52 a share.
SameerSo ₹50 crore buys them about 96 lakh new shares.
RiyaRight. And at least 10% of it has to go to mutual funds.
SameerDo our other shareholders get a say?
RiyaYes. They have to pass a special resolution first. And everyone's slice shrinks. Your 60% would drop to about 50%.
The grown-up version
same idea, exact words
A qualified institutions placement is an issue of equity shares or convertible securities by a listed company to qualified institutional buyers only, approved in advance by a special resolution of shareholders. The price can't be below the average of the weekly highs and lows of the closing price over the two weeks before the relevant date, the day the board or its committee decides to open the issue, though a discount of up to 5% is allowed if shareholders approve it. At least 10% must go to mutual funds, nothing may go to promoters or their relatives, no one may get more than half, and there must be at least two allottees for issues up to ₹250 crore (five above that). Buyers can't sell for a year except on a stock exchange.
Formula
Floor price = Average of the weekly high and low of closing prices over the 2 weeks before the relevant date. Issue price ≥ 95% of the floor.
Which rule asks for itChapter VI (Regulations 171 to 180), SEBI (ICDR) Regulations, 2018; Sections 42 and 62(1)(c), Companies Act, 2013.
Spot it in the wild
a real annual report, a real page
- SBI raised ₹25,000 crore in one QIP during FY26.
- About 30.6 crore new shares went to qualified institutional buyers at ₹817 each.
Don't mix it up
the usual confusions
QIP ≠ rights issue
A rights issue offers new shares to every existing shareholder. A QIP is only for big institutions, and small shareholders can't take part.
QIP ≠ preferential allotment
A preferential allotment goes to named buyers, who can include promoters, under a different pricing rule and lock-in. A QIP goes only to institutions, never to promoters.
QIP ≠ IPO
An IPO is a company's first sale of shares to the public. Only a company that is already listed can do a QIP.
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Hindi mein
क्यूआईपी (QIP)
QIP में लिस्टेड कंपनी जल्दी पैसा जुटाने के लिए नए शेयर सिर्फ़ बड़े संस्थागत निवेशकों, जैसे म्यूचुअल फ़ंड और बीमा कंपनियों, को बेचती है।