NISM Certifications · NISM-Series-XV: Research Analyst · Introduction to Securities Market
A company that already has listed shares issues new shares only to a select group of qualified institutional buyers, without a public offer to retail investors. This route is best described as:
This is a qualified institutions placement. A listed company raises fresh capital by issuing securities only to qualified institutional buyers, without a public offer to retail investors. An IPO is for unlisted companies, while an OFS and a bonus issue do not involve this kind of fresh institutional raising.
- AInitial public offer
- BQualified institutions placementCorrect
- COffer for sale by promoters
- DBonus issue
Explanation
A QIP is a way for a listed company to raise capital by issuing securities to qualified institutional buyers only. An IPO is the first public offer by an unlisted company. An OFS is a sale of existing shares by promoters, not a fresh issue. A bonus issue is a free issue to existing shareholders and raises no money.
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