CRISIL has assigned a CRISIL IPO Grade “1/5″ (pronounced “one on five”) to the proposed initial public offer (IPO) of Varun Industries Limited (VIL). This grade indicates that fundamentals of the issue are poor relative to other listed equity securities in India.

In CRISIL’s opinion, the grading is constrained by VIL’s lack of cogent business and operating strategy in its current business, as well as significant uncertainties associated with the consummation of its plans in new business areas, in most of which it does not have any prior experience and expertise.

The grading also reflects the inadequate information available with management on key aspects of business operations. The grading has taken into consideration VIL’s status as India’s largest exporter of stainless steel utensils, where it aggregates products from many small manufacturers spread across the country to supply to overseas customers.