Consider the following statements about Qualified Institutional Placement and mark the cor...........

Economic Affairs Financial Markets

Consider the following statements about Qualified Institutional Placement and mark the correct one/s

1.It is largely a fund raising tool for companies.

2.It is a process introduced by RBI for raising finance through the issue of securities to qualified institutional buyers.

Code

1 only

2 only

Both 1 and 2

Neither 1 nor 2

छोटे Courses बड़े Results

Master Financial Markets

Prepare through Micro-courses

Try Now

Explanation:

1 only

"It is largely a fund raising tool for companies" - This statement is correct. Qualified Institutional Placement (QIP) is indeed a method used by companies to raise funds by issuing securities to qualified institutional buyers (QIBs) such as mutual funds, insurance companies, banks, and foreign institutional investors (FIIs).

"It is a process introduced by RBI for raising finance through the issue of securities to qualified institutional buyers" - This statement is incorrect. QIP is not a process introduced by the Reserve Bank of India (RBI). It is a mechanism regulated by the Securities and Exchange Board of India (SEBI), which allows listed companies to raise funds from qualified institutional buyers through the issue of equity shares or other securities.

Therefore, only statement 1 is correct,