Benefits of Qualified Institutional Placements
Time saving:
QIBs can be raised within short span of time rather than in FPO, Right Issue takes long process.
Rules and regulations:
In a QIP there are fewer formalities with regard to rules and regulation, as compared to follow-on public issue (FPO) and rights Issue.
A QIP would mean that a company would only have to pay incremental fees to the exchange. Additionally in the case of a GDR, you would have to convert your accounts to IFRS (International Financial Reporting Standards). For a QIP, company’s audited results are more than enough
Cost-efficient:
The cost differential vis-à-vis an ADR/GDR or FCCB in terms of legal fees, is huge. Then there is the entire process of listing overseas, the fees involved. It is easier to be listed on the BSE/NSE vis-à-vis seeking a say Luxembourg or a Singapore listing.
Lock-in:
It provides an opportunity to buy non-locking shares and as such is an easy mechanism if corporate governance and other required parameters are in place.
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