Qualified Institutional Placement (QIP) is a method by which listed companies raise capital by issuing equities, or other equity convertible securities to qualified institutional buyers (QIBs) . QIP is a process introduced by the Securities and Exchange Board of India (SEBI) to enable listed companies to raise finance through the issue of securities to QIBs. QIPs are a way to issue shares to the public without going through standard regulatory compliance. QIPs follow a looser set of regulations, but where allottees are more highly regulated.

To be allowed to raise capital through a QIP, a firm must be listed on a stock exchange along with the minimum shareholding requirements as specified in their listing agreement. Also, the company must issue at least 10% of its issued securities to mutual funds or allottees. The only parties eligible to purchase QIPs are QIBs, which are accredited investors, as defined by the market regulator.

QIPs are a lot cheaper in terms of legal fees or raising costs compared to listing overseas. The regulatory bodies define the price at which the QIP can be priced so as to not avail too much risk for either the QIBs or the company. The already traded stock price is taken for calculation for a period of six months where the price is averaged out, and is then set at the issue price.

If a company can comfortably raise money from a QIP in the share market even in uncertain times, it reflects its sound financial health and shows investors belief in the business model. Once a company successfully undertakes a QIP, there is generally an increase in the companys share price. However, this may not always be true. If a company is allotting QIP shares at a big discount to floor price, it does suggest that the demand is not great in which case the stock.