Sebi okays IPO ratings

In keeping with the decisions taken at the last board meeting, the Sebi on Monday released more details of its proposed IPO rating programme.

Sebi has okayed Crisil, Fitch Ratings, Icra and CARE to assign ratings to IPOs. The rating fees will vary between Rs 2 lakh and 20 lakh per issue.

The grade assigned to any issue [on a scale of 1 to 5] represents a relative assessment of 'fundamentals' in relation to other listed equity securities. [It is for] assessing offerings of companies where there is no track record of their market performance," Sebi said

"The agencies have to forward the names and details of IPOs graded by them on a monthly basis to Sebi and stock exchanges for uploading on their website for public information. As such the company does not have a choice in accepting or rejecting the grade." The IPO grading approved by the agencies, shall form part of the prospectus for the IPO."