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MUMBAI : JM Financial Ltd on Tuesday announced a qualified institutional placement (QIP) to raise about $100 million from financial institutions. Investment bank IDFC Securities is advising the financial services firm on the fund-raising.

A QIP is a tool used by listed companies to sell shares or other securities that are convertible into stocks to qualified institutional buyers such as mutual funds.

JM Financial has set a floor price of 66.72 per share for the offering. It can offer investors a discount of up to 5% on the floor price, according to Securities and Exchange Board of India (Sebi) regulations.

On Tuesday, shares of JM Financial closed at 70.90 apiece, down 1.46% on BSE.

In recent weeks, several lenders have announced fund-raising plans with an eye on bolstering balance sheets to deal with contingencies and opportunities arising out of the covid-19 pandemic.

Last month, Kotak Mahindra Bank raised 7,445 crore through a QIP, selling shares to institutional investors such as CPPIB, Oppenheimer, and ICICI Prudential Asset Management Co. In May, IDFC First Bank Ltd raised 2,000 crore through a preferential allotment of shares to a group of investors including private equity firm Warburg Pincus.

Several non-bank lenders like Mahindra Finance and Shriram Transport Finance also plan to raise funds through rights issues.

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