CRISIL assigns 4/5 grade to Precision Pipes IPO
Rating agency CRISIL assigns '4/5' grade to the proposed Rs 75 crore IPO of Precision Pipes and Profiles Company.
By PTI |
NEW DELHI: Rating agency CRISIL has assigned '4/5' grade to the proposed initial public offering of automotive sealing system maker Precision Pipes and Profiles Company (PPAP), to raise up to Rs 75 crore.
The grade indicates that the fundamentals of the issue are above average, relative to other listed equity securities in India, the agency said in a release on Tuesday.
The company has proposed issuance of 50 lakh equity shares at a price of Rs 150 each to part finance its plan to double capacity to 9.9 million kg by 2008-09 at a total outlay of Rs 94.6 crore.
It takes into account the company's Heath revenue growth potential, strong product and tool development capabilities as well as the possibility of revenue and profit from the proposed export project.
The grading reflects the success of the firm's management in transforming a small plastic processing business into a Tier-I supplier of PVC profiles to leading passenger car original equipment manufacturers like Honda, Toyota and Suzuki, CRISIL said.
The agency also considered PPAP's track record of strong client and collaborator relationships over an extended period and the expected enhancement in management's corporate governance performance with the appointment of high-profile independent directors on board.
The grading further took into account the fact that future margins are likely to be lower, and the uncertainties arising out of the absence of a succession plan in the group's finance function and the impact of any future separation of promoters on the company.
The grade indicates that the fundamentals of the issue are above average, relative to other listed equity securities in India, the agency said in a release on Tuesday.
The company has proposed issuance of 50 lakh equity shares at a price of Rs 150 each to part finance its plan to double capacity to 9.9 million kg by 2008-09 at a total outlay of Rs 94.6 crore.
It takes into account the company's Heath revenue growth potential, strong product and tool development capabilities as well as the possibility of revenue and profit from the proposed export project.
The grading reflects the success of the firm's management in transforming a small plastic processing business into a Tier-I supplier of PVC profiles to leading passenger car original equipment manufacturers like Honda, Toyota and Suzuki, CRISIL said.
The agency also considered PPAP's track record of strong client and collaborator relationships over an extended period and the expected enhancement in management's corporate governance performance with the appointment of high-profile independent directors on board.
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The grading further took into account the fact that future margins are likely to be lower, and the uncertainties arising out of the absence of a succession plan in the group's finance function and the impact of any future separation of promoters on the company.
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