Consider the following statements about Qualified Institutional Placement QIP 1 It is a designation ...........

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Consider the following statements about Qualified Institutional Placement (QIP)

1. It is a designation of a securities issue given by the Securities and Exchange Board of India (SEBI)

2. It allows both listed and non-listed companies to raise capital from its domestic markets without the need to submit any pre-issue filings to market regulators

Select the correct statements

1 only

2 only

Both

None

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Explanation:

A qualified institutional placement (QIP) is a designation of a securities issue given by the Securities and Exchange Board of India (SEBI) that allows an Indian-listed company to raise capital from its domestic markets without the need to submit any pre-issue filings to market regulators. Companies are only permitted to raise capital through issuing securities.
For the issuing company, QIPs are less cumbersome than IPOs and FPOs. It doesn’t have to file a pre-issue document with the capital markets regulator, and only a placement document with the stock exchanges, which only has details of the issue.
QIP is a less expensive mode of raising capital than, say, an IPO, FPO or rights issue.
SEBI introduced the QIP process through a circular issued on May 8, 2006, to prevent listed companies in India from developing an excessive dependence on foreign capital.