What are the factors that are evaluated to assess the fundamentals of the issue while arriving at the IPO grade?
The IPO grading process is expected to take into account the prospects of the industry in which the company operates, the competitive strengths of the company that would allow it to address the risks inherent in the business(es) and capitalise on the opportunities available, as well as the companys financial position. While the actual factors considered for grading may not be identical or limited to the following, the areas listed below are generally looked into by the rating agencies, while arriving at an IPO grade Business Prospects and Competitive Position i. Industry Prospects ii. Company Prospects Financial Position Management Quality Corporate Governance Practices Compliance and Litigation History New ProjectsRisks and Prospects It may be noted that the above is only indicative of some of the factors considered in the IPO grading process and may vary on a case to case basis.
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