Initial Public Offering (IPO) Grading has been introduced as an attempt to make additional information available for investors to facilitate their assessment of equity issues offered through an IPO. With the increase in the domestic retail and institutional participation in the equity markets, the markets regulator, Securities and Exchange Board of India, has made the grading of these IPOs mandatory. Infomerics is one of the approved credit rating agencies for undertaking IPO Grading.
Investment decisions for IPOs presently require analysing complex disclosure documents, which is a challenge for investors, especially retail investors. IPO Grading aims to provide an independent, unbiased view of the company's fundamentals, enabling the investor to benchmark new issuers with their peers in the equity universe. It is a one-time assessment undertaken prior to the proposed initial public issue; therefore, there would be no ongoing coverage of the issuer after the initial grading.