ICRA: Strong debut

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Credit rating agency, ICRA, gained 143 per cent on debut to close at Rs 797.60 on BSE. The company had offered 25.81 lakh shares to the public at Rs 330 a share. The trading on BSE and NSE aggregated 3.15 crore shares, which was 3.15 times of the company's equity capital and 12.20 of the public offer.

No wonder, the stock opened at Rs 540, and rose to an intra day high of Rs 880 before settling at Rs 797.60. At the current price, the company's shares are traded at P/E of 50 times, based on the annualized EPS of 15.90 for nine months ended December 2006. CRISIL, the listed credit rating firm, is trading at a P/E of 32.20 times.

Global rating agency, Moody's, is the single largest shareholder in ICRA post the IPO, even as its holding in the company has declined to 28.51% from 29.1% following the IPO.

ICRA is the No. 2 credit rating agency in the country with 399 outstanding public issues under its belt. In addition to providing rating and grading services, ICRA provides research-based information services and outsourcing services.

ICRA would have an additional revenue stream thanks to market regulator, Securities & Exchange Board of India (Sebi)'s decision last month making the grading of IPOs mandatory for companies.

The companies issuing IPOs will have to get their offers graded either by CRISIL, ICRA or CARE. ICRA will also be able to garner business from State Bank of India (SBI), which was not possible earlier due to regulations.