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CS Executive · Capital Market and Securities Laws · Basics of Capital Market

Meridian Pharma Ltd, a listed company, wants to raise funds quickly by issuing equity shares only to qualified institutional buyers, without a lengthy public offer process and without a prospectus. Which route is it adopting?

The company is using a qualified institutions placement, a fast route for listed companies to raise equity from qualified institutional buyers through a placement document instead of a prospectus. IPOs, preferential allotments and bonus issues do not fit this description.

  1. AQualified institutions placementCorrect
  2. BPreferential allotment to promoters
  3. CInitial public offer with book building
  4. DBonus issue to existing members

Explanation

A QIP is a route for listed companies to raise capital from qualified institutional buyers through a placement document rather than a prospectus. A book-built IPO is a public offer by an unlisted company, preferential allotment targets identified persons, and a bonus issue raises no funds.

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