What is a QIP? Qualified institutional placement
To answer what is a QIP: a qualified institutional placement is an issue of shares, or other eligible securities, by a listed Indian company to qualified institutional buyers on a private placement basis. The rulebook is Chapter VI of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018, Regulations 171 to 180, in SEBI's consolidation amended up to 21 March 2026 (read 21 October 2026). The price has a formula floor, at least 10% of the issue must go to mutual funds, and nothing may be allotted to the company's promoters.
Definition
A QIP (qualified institutional placement)
is an issue of eligible securities, such as equity shares, by a listed Indian company to qualified institutional buyers on a private placement basis, under Chapter VI of the SEBI ICDR Regulations, 2018. It needs a shareholders' special resolution, is priced at or above a two-week average of closing prices, and bars the promoters as buyers. Source: SEBI ICDR.
What is a QIP, and who can buy in one?
Only qualified institutional buyers (QIBs) can buy. ICDR Regulation 2(1)(ss) lists them. The main ones are mutual funds, venture capital funds, alternative investment funds and foreign venture capital investors registered with SEBI; foreign portfolio investors other than individuals, corporate bodies and family offices; public financial institutions; scheduled commercial banks; insurers registered with IRDAI; and provident and pension funds with a corpus of at least 25 crore rupees. Retail investors cannot bid. The QIB explainer covers the full list.
Regulation 2(1)(tt) also counts an offer for sale by promoters on a private placement basis as a QIP. Regulation 173 lets promoters use that route to meet minimum public shareholding, and they then may not buy or sell the company's shares for twelve weeks before the issue opens or after it closes, except through an offer for sale on the exchange or an open market sale, with at least two weeks between offers.
What does a company need before it can run a QIP?
Regulation 172 and the parts after it set the conditions. As printed on 21 October 2026:
| Condition | Rule |
|---|---|
| Shareholder approval | A special resolution naming the QIP route and the relevant date; allotment within 365 days of it (Reg. 172(1)(a)) |
| Listing history | Shares of the same class listed for at least one year before the meeting notice, except for a QIP made to meet minimum public shareholding (Reg. 172(1)(b)) |
| Fugitive offenders | Not available if any promoter or director is a fugitive economic offender (Reg. 172(1)(c)) |
| Gap between QIPs | At least two weeks after the previous QIP (Reg. 172(3)) |
| Lead manager | One or more SEBI-registered merchant bankers, at least one not an associate of the issuer (Reg. 174) |
| Offer document | A preliminary placement document and a placement document, posted on the exchange and company websites (Reg. 175(4)) |
| Use of money | If the issue, excluding any offer for sale, exceeds 100 crore rupees, a credit rating agency monitors the proceeds and reports quarterly (Reg. 173A) |
How is the QIP price set?
Regulation 176(1) says the issue price may not be less than the average of the weekly high and low of the closing prices of the shares during the two weeks before the relevant date. The exchange used is the one where the shares traded the highest volume in those two weeks. For an equity QIP, the relevant date is the date of the board or committee meeting that decides to open the issue (Regulation 171(b)(i)).
The company may price up to 5% below that floor, but only with shareholder approval under the special resolution. No approval is needed when the QIP is an offer for sale by promoters to meet minimum public shareholding. Since 18 May 2024, Regulation 176(5) also lets the price calculation exclude the effect of a material price movement and the confirmation of a reported event or information, as per the framework under LODR Regulation 30(11).
10%
Minimum share of a QIP's eligible securities that must be allotted to mutual funds; any unsubscribed part may go to other QIBs
Source: SEBI ICDR Regulation 179(2)(a), amended up to 21 March 2026, read 21 October 2026
How are QIP shares allotted?
Regulations 179 and 180 set the allotment rules:
- Bidders may not withdraw or lower their bids after the issue closes.
- At least 10% goes to mutual funds, with any shortfall open to other QIBs.
- No allotment, direct or indirect, to a QIB that is a promoter or related to the promoters. A QIB with rights under a shareholders' or voting agreement with the promoters, veto rights, or the right to appoint a nominee director counts as related.
- At least two allottees for an issue of up to 250 crore rupees, and at least five above that. No single allottee may get more than 50% of the issue, and QIBs in the same group or under the same control count as one.
After allotment, Regulation 178 bars the buyer from selling for one year except on a recognised stock exchange. Convertible securities issued through a QIP must convert within 60 months (Regulation 177).
Where does a QIP show up in the filings?
The placement documents sit on the exchange and company websites. Where a monitoring agency is required, the company files its report with the exchange within 45 days of each quarter end, a trail covered in the monitoring agency report post. The change in ownership then shows 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 what is a QIP in one line: an institution-only share issue with a formula price floor, a mutual fund minimum and no promoter buyers. The QIP vs FPO and preferential allotment vs QIP pages compare it with the other routes.
Flock reads primary filings and disclosures, dates each one, and links back to the source. What the data means for you is your call to make.
Frequently asked questions
What is a QIP in the share market?
A QIP, or qualified institutional placement, is an issue of eligible securities, such as equity shares, by a listed Indian company to qualified institutional buyers on a private placement basis. It is governed by Chapter VI (Regulations 171 to 180) of the SEBI ICDR Regulations, 2018. Source: SEBI ICDR Regulations, amended up to 21 March 2026, read 21 October 2026.
How is the QIP floor price set?
Regulation 176(1) sets the floor as the average of the weekly high and low of the closing prices on the exchange with the highest trading volume, over the two weeks before the relevant date. The relevant date is the board or committee meeting that decides to open the issue. A discount of up to 5% needs shareholder approval. Source: SEBI ICDR Regulations 171 and 176, read 21 October 2026.
Who can buy shares in a QIP?
Only qualified institutional buyers as defined in ICDR Regulation 2(1)(ss), such as registered mutual funds and AIFs, scheduled commercial banks, insurers, and foreign portfolio investors other than individuals, corporate bodies and family offices. Retail investors cannot bid, and no allotment may go to the issuer's promoters or persons related to them. Source: SEBI ICDR Regulations 2(1)(ss) and 179, read 21 October 2026.
Can QIP shares be sold straight after allotment?
Only on a stock exchange. Regulation 178 bars an allottee from selling QIP securities for one year from allotment except on a recognised stock exchange, so an off-market sale within that year is not allowed. Source: SEBI ICDR Regulation 178, amended up to 21 March 2026, read 21 October 2026.
Flock tracks these filings, sourced, dated, and linked back to the original. See what smart-money entities disclosed, without the guesswork about what it means.
Disclosures shown are public regulatory filings. Data may be delayed or incomplete. Smart-money entities may no longer hold positions shown. Not investment advice.