The emphasis of the IPO Grading exercise is on evaluating the prospects of the industry in which the company operates , its competitive strengths that would allow it to address the risks inherent in the business(es) and effectively capitalise on the opportunities available as well as the company’s financial position.

In case the IPO proceeds are planned to be used to set up projects, either greenfield or brownfield, rating agency evaluates the risks inherent in such projects, the capacity of the company’s management to execute the same, and the likely benefits accruing from the successful completion of the projects in terms of profitability and returns to shareholders. Due weightage is given to the issuer company’s management strengths and weaknesses and issues , if any, from the corporate governance perspective.

Accordingly, IPO Grading methodology examines the following key variables:

• Business and Competitive Position
• New Projects—Risks and Prospects
• Financial Position and Prospects
• Management Quality
• Corporate Governance practices
• Compliance and Litigation History

SEBI does not play any role in the assessment made by the grading agency. The grading is intended to be an independent and unbiased opinion of a rating agency.