QIP vs FPO: how the two share issues differ (2026)
On QIP vs FPO: both let a company that is already listed raise fresh capital by issuing new shares, and they differ first on who may buy. A QIP (qualified institutions placement) is placed only with qualified institutional buyers under Chapter VI of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018. An FPO (further public offer) is a public issue under Chapter IV, open to retail investors, with set portions of the offer for each investor class. Every rule below is from the ICDR consolidation amended up to 21 March 2026, read on 22 October 2026.
Definition
QIP and FPO
are two routes for a listed company to issue new shares. A QIP is a private placement to qualified institutional buyers, approved by special resolution and priced at or above a formula floor. An FPO is a public offer under a filed offer document, with portions set aside for retail, non-institutional and institutional bidders. Source: SEBI ICDR Regulations, 2018.
QIP vs FPO: what are the core differences?
This table sets the two chapters of the ICDR Regulations side by side, as printed on 22 October 2026:
| QIP | FPO | |
|---|---|---|
| ICDR chapter | Chapter VI, Regulations 171 to 180 | Chapter IV, from Regulation 101 |
| Who can buy | Qualified institutional buyers only (Reg. 2(1)(ss)) | The public, including retail |
| Document | Preliminary and final placement documents, circulated only to select investors | Draft offer document filed with SEBI and the exchanges (Reg. 123) |
| Price | Formula floor, up to 5% discount with approval (Reg. 176) | Fixed price, or a band with cap 105% to 120% of the floor (Reg. 127) |
| Allocation | At least 10% to mutual funds (Reg. 179(2)(a)) | Book built: at least 35% retail, at least 15% non-institutional, at most 50% QIB (Reg. 129(1)) |
| Promoters as buyers | Barred (Reg. 179(2)(b)) | Not covered by this bar |
The FPO allocation in the table is for an issuer that meets Regulation 103(1). An issuer that changed its name in the last year without earning at least half its revenue from the new activity must book-build and allot at least 75% of the net offer to qualified institutional buyers (Reg. 103(2) and 129(2)).
How is a QIP priced versus an FPO?
The QIP price is set by formula, and the FPO price by the issuer within a band.
5%
Maximum discount on the QIP floor price, and only with shareholder approval
Source: SEBI ICDR Regulation 176(1), amended up to 21 March 2026, read 22 October 2026
Under Regulation 176(1), a QIP may not be priced below the average of the weekly high and low of the closing prices over the two weeks before the relevant date. The explanation to the regulation fixes the exchange: the one where the shares recorded the highest trading volume in those two weeks. Since 18 May 2024, Regulation 176(5) lets the issuer exclude the price effect of a material price movement and a confirmed reported event under LODR Regulation 30(11).
An FPO issuer names a fixed price, or a floor price or price band in the red herring prospectus. Regulation 127 keeps the cap of the band at no more than 120% and no less than 105% of the floor, and requires the floor or band to be announced at least two working days before bidding opens. Up to 60% of the institutional portion of a book-built FPO may go to anchor investors (Reg. 129(3)).
Who ends up holding the shares?
The allocation rules decide who appears on the register. In a QIP, at least 10% goes to mutual funds, no single allottee may get more than 50% of the issue, and there must be at least two allottees for an issue up to 250 crore rupees and five above that (Reg. 179 and 180). Allottees cannot sell the shares for one year except on a recognised stock exchange (Reg. 178). In a book-built FPO under Regulation 129(1), retail individual investors get at least 35% of the net offer and mutual funds get 5% of the institutional portion, with more available from the rest of it.
Which disclosure do you read for each?
A QIP's preliminary and final placement documents are posted on the exchange and issuer websites with a disclaimer that no offer is being made to the public. An FPO's draft offer document is filed with SEBI and hosted for public comment for at least 21 days (Reg. 124(1)), and the issue then stays open for 3 to 10 working days (Reg. 142(1)). Either way the new shares then show up in the next quarterly shareholding pattern, which LODR Regulation 31(1)(b) requires within 21 days of quarter end. Flock's Smart Money Report for Q2 FY27 ranks the quarter's shareholding changes as filed.
So on QIP vs FPO, the distinction is the buyer and the rulebook: a QIP is institution-only, formula-priced and closed to promoters, and an FPO is public, band-priced and split by investor class. The preferential allotment vs QIP page compares the QIP with the other private route. What either means for your own decision is your call to make.
Frequently asked questions
What is the difference between a QIP and an FPO?
A QIP is a private placement by a listed company to qualified institutional buyers only, under Chapter VI of the SEBI ICDR Regulations. An FPO is a further public offer under Chapter IV, open to retail and other investors, with a draft offer document filed with SEBI and the exchanges. Source: SEBI ICDR Regulations, 2018, amended up to 21 March 2026, read 22 October 2026.
How is the QIP price set compared with an FPO?
A QIP floor is the average of the weekly high and low of closing prices over the two weeks before the relevant date, on the exchange with the highest volume, with up to a 5% discount if shareholders approve. An FPO uses a fixed price or a price band whose cap is between 105% and 120% of the floor. Source: SEBI ICDR Regulations 176 and 127, read 22 October 2026.
Can retail investors take part in a QIP?
No. Only qualified institutional buyers as defined in ICDR Regulation 2(1)(ss) can bid, such as registered mutual funds, scheduled commercial banks, insurers, and foreign portfolio investors other than individuals, corporate bodies and family offices. In a book-built FPO under Regulation 129(1), at least 35% of the net offer is for retail individual investors. Source: SEBI ICDR Regulations, read 22 October 2026.
Can promoters buy shares in a QIP?
No. Regulation 179(2)(b) bars any allotment, direct or indirect, to a qualified institutional buyer that is a promoter or a person related to the promoters, which includes a buyer with a shareholders' agreement with the promoters, veto rights, or the right to name a director. Source: SEBI ICDR Regulations, amended up to 21 March 2026, read 22 October 2026.
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