IPO grading move perks up demand for analysts

The Securities and Exchange Board of India has thrown out a job spinner with its mandatory initial public offering (IPO) grading norms, which is making rating agencies firm up plans to expand their headcount to cope with the sudden surge in business.

The four rating agencies - Crisil, ICRA, CARE and Fitch India - authorised for IPO grading are planning a huge expansion in the headcount of their analysts with some of them planning more than four-fold jump in the total employee strength for this business. The agencies are eyeing a market share of 25-35% each in the market with an estimated size of at least Rs 50 crore.

"Our IPO grading unit currently comprises 12 analysts, and we plan to add another 30-40 analysts in the next 2-3 months," R Ravimohan, managing director and CEO, Crisil told PTI.

The hiring would depend on the flow of business, and Crisil could even draw people from the equity and research wing if the flow of assignments is heavy, he added.

Naresh Takkar, managing director,  ICRA said: "ICRA is definitely planning to increase headcount but that would be specific to the demand."

It is estimated that over 150 IPOs are likely to tap the market to raise close to Rs 45,000 crore this year, which could result in over 250 IPO gradings as the companies are allowed to go for multiple ratings for their issues.

"We keep recruiting people. With business slated to grow in this segment, we will also increase the headcount," D R Dogra, executive director, CARE Ratings said.