Qualified Institutional Buyers (QIB's) are purchaser of securities which are not meant for the common investor or is beyond his/her capabilities to acquire. QIB's deal in "Sophisticated financial instruments " which are out of reach for the common investor. The financial muscle and expertise involved is much high here. The shares are usually bought for the purpose of investment and not to be sold to the public for a designated length of time as mentioned in the contract. These buyers need much less protection from the issuer. QIB's deal in private placement of securities which is dealing in securities without having to register with the Stock Exchange Board of India (SEBI). They can be
a) Public financial institution as defined in section 4A of the Companies Act, 1956;
b) Scheduled commercial banks;
c) Mutual funds;
d) Foreign institutional investor registered with SEBI;
e) Multilateral and bilateral development financial institutions;
f) Venture capital funds registered with SEBI.
g) Foreign Venture capital investors registered with SEBI.
h) State Industrial Development Corporations.
i) Insurance Companies registered with the Insurance Regulatory and Development Authority (IRDA).
j) Provident Funds with minimum corpus of Rs.25 crores
k) Pension Funds with minimum corpus of Rs. 25 crores
This is a comprehensive link of all the entities who need not register with SEBI as QIB's. All these entities come under the category of QIB's and participate in primary issues with the status as a QIB. Qualified Institutional Buyers are also known as Qualified Institutional Investors
The recent rush is because of the recession there was a cash crunch in the market and the various companies especially real estate had problems staying afloat and when the market starting showing sign of revival the companies launched QIB's. Reason being the common investor still do not have enough money and this is a much faster process.