Crisil has assigned an IPO grade of '4/5' (pronounced "four on five") for the proposed initial public offering (IPO) of OnMobile Global (OGL). The grade indicates that the fundamentals of the issue are above average relative to other listed equity securities in India. The company will tap the capital markets with a public issue of 1.09 crore equity shares of Rs 10 each, and is targetting an issue size in the range of Rs 350-450 crore. The grading reflects OGL's position as the largest player in the mobile value-added services (VAS) market in India, and its strong presence in the voice portal and ring back tone (RBT) segments of the VAS market. The grading is tempered by the fact that OGL has low bargaining power with its customers i.e. telecom operators, as it does not brand its products and depends on the operators to take its products to the market.The grading also reflects the anticipated change in OGL's revenue profile, as it opens up its proprietary platform to third parties for applications development. This will cause the business mix to move from the current content cum platform.
