Apollo Hospital launches QIP
Hospital Chain Apollo Hospitals Enterprise has launched QIP. Its floor price (floor price) has been fixed at around Rs 2508 with a 3.4 percent discount.
- January 19, 2021, 10:49 AM IST
The money from this QIP will be used by the company to expand its business, reduce debt and meet the expenses incurred on expanding the company’s digital capability. However, there have also been reports that Apollo Hospitals can use the money received from the issue to acquire a 50 per cent stake in a joint venture. Significantly, the bed capacity of Apollo Hospitals is around 10,209. The company has 71 hospitals across the country by 30 November 2020.
What is QIP
QIP is a way for companies to raise capital. A company listed on the stock market raises capital by issuing securities such as shares, partial or fully convertible debentures in addition to warrants to qualified institutional buyers (QIBs) under QIP. These securities are converted into shares after a fixed period. Apart from preferential allocation, this is another way to raise capital soon.When and how did QIP originate?
Sebi started it in 2006 to allow companies to raise money from the market in a short period. Its purpose was also to reduce the excessive dependence of domestic companies on foreign capital. Prior to QIP, many companies preferred to raise money through foreign currency convertible bonds (FCCBs) or Global Depository Receipts (GDRs) to avoid the complex formalities of raising capital from the domestic market.