CRISIL has assigned India’s first IPO grading under the new SEBI guidelines that were announced on April 30, 2007.

A CRISIL IPO Grade “2/5″ (pronounced “two on five”) has been assigned to the proposed initial public offer of Kiri Dyes and Chemicals Ltd. (KDCL). This grade indicates that the fundamentals of the issue are below average relative to other listed equity securities in India.

This grading reflects the company management’s successful track record in setting up a large export-oriented dyes business over the last 10 years, its relationships with global dye companies, and the technical expertise of its founder and Chairman Mr. Pravin Kiri.

However, the grading is constrained due to the limited upside in the profit potential of the company’s dyes business, the moderately lower than existing returns from the planned deployment of the IPO proceeds, and the low pricing power traditionally witnessed by sulphuric acid manufacturers - the facility that the company is planning to set up with the IPO proceeds. The company plans to mitigate the price risk by focusing on value added products.