CRISIL assigns IPO grade 4/5 to Gujarat State Petroleum Corporation

MUMBAI: CRISIL Research has assigned a CRISIL IPO grade of "4/5" to the proposed initial public offer of Gujarat State Petroleum Corporation ( GSPC). This grade indicates that the fundamentals of the IPO are above average relative to other listed equity securities in India.

The IPO grade assigned to GSPC takes into account the company’s presence across the natural gas value chain – exploration and production (E&P), gas trading, gas transmission and city gas distribution (CGD).

In line with GSPC’s overall strategy of attaining a well-balanced growth by tapping the potential across gas value chain, it is enhancing its efforts in securing own gas supply sources, development of Deen Dayal West (DDW) field in the Krishna-Godavari (KG) basin is a step in this direction.

Our grading also draws strength from the strong and professional management of the company.

The abovementioned grading strengths are partially mitigated by the inherent risks involved in the E&P business. All of GSPC’s overseas E&P assets are in the exploration stage and thus, it runs the risk of sinking investments without making any hydrocarbon discovery. Besides, each of the company’s business segments are prone to any changes in the prevailing regulations.