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ICRA assigns first ever IPO Grading in Indian market

Written by: Staff

New Delhi, Apr 13 (UNI) Credit rating agency ICRA today assigned its first ever Initial Public Offering (IPO) Grade 2 to the proposed IPO of SRS Entertainment Limited.

ICRA's IPO grading takes into account the satisfactory operating performance of the entity's first project -- a mall and multiplex in Faridabad, Haryana.

SRS proposes an IPO of 2,28,57,200 shares (of which 42,87,200 are reserved for promoters) at a likely price band of Rs 35-42.

The grading also factors in the aggressive expansion being undertaken by the entity, managing which would be a key challenge given the increasing competitive pressures in the sector and the limited ability of the promoters to extend further financial support to the company.

ICRA assigns IPO gradings on a scale of 1 to 5, with Grade 5 indicating strong fundamentals and Grade 1 weak fundamentals.

An ICRA IPO Grade is a symbolic representation of ICRA's current assessment of the fundamentals of the issuer concerned, and is not a certificate of statutory compliance or a view on the issuer's future stock price or Credit Rating.

The grading is however constrained by the limited geographic diversity of revenues, the increasing level of competition anticipated in future in the entity's existing region of operations and the relatively short period of its proven performance.

SRS Entertainment Limited, engaged in the business of development and management of multiplexes, malls and value retail stores, reported a net profit of Rs 22 million in the financial year 2005.


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