IPO Grading

  • Concept

CARE’s IPO grading is a service aimed at facilitating the assessment of equity issues offered to public. CARE’s IPO grading is an independent and professional opinion on the fundamentals of the issuer. The grade assigned to any individual issue represents a relative assessment of the ‘fundamentals’ of that issuer.

CARE would assess the overall fundamentals of an IPO on a five-point scale. Highest score to be assigned by CARE to any IPO would be 5 (indicating ‘Strong Fundamentals') and the lowest score would be 1 (indicating ‘Poor Fundamentals’). CARE’s IPO grading would involve an in-depth assessment of the various quantitative and qualitative parameters of the issuer. Quantitative parameters include growth prospects of the industry, financial strength & operating performance of the issuer whereas, qualitative parameters primarily include management capability, promoters’ evaluation, accounting policies and corporate governance practices.

IPO Grading – Grading Symbols and Definition

Symbols Definition
5 Strong fundamentals
4 Above average fundamentals
3 Average fundamentals
2 Below average fundamentals
1 Poor fundamentals

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