Sunday, April 05, 2015

Top 10 QIPs in FY15 
Relative transparency in QIP valuation, however, doesn't eliminate chances of a loss for investors. About a quarter of the QIPs issued in FY15 are underwater, with the issuer (company) stock price below the issue price. 

This ratio is about half if the issues are considered on the basis of the funds raised. Of about Rs.29,000 crore raised by India Inc through QIPs in FY15, about Rs.15,000 crore worth of issues are trading below the issue price. The biggest losses for investors were in the infrastructure sector.

Some of the best bets for QIP investors are J Kumar Infra (stock price up 127% from the issue price), ITD Cementation (up 119%), Ashok Leyland (up 106%), YES Bank (54%) and Idea Cellular (up 41.2%).

Experts blame this on opportunistic fund raising by many companies. "Last financial year, two kinds of companies raised capital - those that were highly indebted and needed capital to sustain operations and those with a good track record, which used the rally to raise capital to fund growth. The first group disappointed investors, while latter offered a win-win to all," says Nitin Jain, head (capital markets), Edelweiss Financial Services.

Infrastructure developers such as Jaiprakash Associates, GMR Infra, KSK Power Ventures, Jyoti Structures and Supreme Infra fell in the first category. They took advantage of the market euphoria about infrastructure growth, following the National Democratic Alliance government coming to power at the Centre in May last year. But the euphoria gave way to losses when growth and earnings growth fell short of expectations. The stock prices fell sharply, as investors moved to quality stocks.

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