|
Public issue of 8,000,000 equity shares of face value Rs 10 at a targeted issue size of Rs 680 - 700 million
|
|
CRISIL has assigned a CRISIL IPO Grade "3/5" (pronounced "three on five") to the proposed initial public offering of V-Guard Industries Ltd (V-Guard). This grade indicates that the fundamentals of the issue are average in relation to the other listed equity securities in India.
V-Guard dominates the stabiliser business in southern India, with a high market share and brand recall; it has a growing presence in the small-ticket electronic and electrical goods industry in general. The grading also factors in the strengths of the company's model of outsourcing stabiliser manufacture, which has ensured high margins in past years.
However, the company has had limited success in products other than stabilisers; its move into the fragmented and price-sensitive LT power cable segment will therefore prove challenging. V-Guard's proposed expansion into the northern market is likely to pose its own set of obstacles: the company will compete with established brands, and will find it difficult to replicate its outsourcing model in the north, where it does not have relationships with an established base of contract manufacturers. While the management has succeeded in building a strong presence in southern India, its approach to capturing and exploiting market potential has been-to a large extent-reactive. Success in the proposed expansion will thus require more aggression and dynamism than the management has yet demonstrated.
About the company
V-Guard trades in stabilisers, UPS systems, electric pumps, fans, and electric water heaters, and makes and sells electric cables and solar water heaters. Stabilisers, electric pumps, and electric cables, are thecompany's key products, accounting for more than 80 per cent of revenues. Trading contributes about 73 per cent of the company's revenues.
|
Media Contact:
Ramya Krishnan Anil
Head, Market Development & Communications
CRISIL
Phone: +91-22-6758-8051
Mobile: +91 98203 42671
Facsimile: +91-22-6758-8088
Email: RamyaKA@crisil.com
|
Analytical Contacts:
Ajay Dwivedi
Director, CRISIL Research
Tel: +91-22-6691 3502
Email: adwivedi@crisil.com
Sudhir Nair
Head, CRISIL Research
Phone: +91-22-6691 3526
Email : snair@crisil.com
|
Client Servicing Contact:
Client Servicing
Tel: +91-22-6691 3561
Email: clientservicing@crisil.com
|
|
The company was incorporated in 1996. It was promoted by Mr Kochouseph Chittilappilly, who had twenty years of experience in the manufacture and sale of stabilisers. His son, Mr. Mithun Chittilappilly, joined the company in 2003, and is currently executive director, primarily involved in new market and new product development. The promoter group is also engaged in the amusement park business - Veega Land in Cochin and Wonderla near Bangalore.
For the year ended March 31, 2007, V-Guard reported net profits of Rs 182.4 million on a turnover of Rs 2.33 billion, as compared with net profits of Rs 92 million on a turnover of Rs 1.77 billion in the preceding financial year.
About CRISIL IPO Grading
CRISIL IPO (Initial Public Offering) Grading is an opinion on the fundamentals of the graded issue that reflects CRISIL's independence and expertise. This opinion is expressed as a relative assessment in relation to other listed equity securities in India. The assessment is based on a grading exercise carried out by industry specialists from CRISIL Research. A CRISIL IPO Grade 5/5 indicates strong fundamentals and a CRISIL IPO Grade 1/5 indicates poor fundamentals. CRISIL IPO Grading reflects its assessment of the graded company's equity fundamentals as distinct from an assessment of debt fundamentals. A CRISIL IPO Grade should not be construed to mean a comment on the price of the graded security nor is it a recommendation to invest or not to invest in the graded security.
About CRISIL Limited
CRISIL is India's leading Ratings, Research, Risk and Policy Advisory Company.
About CRISIL Research
CRISIL Research is India's largest independent, integrated research house. We leverage our unique, integrated research platform and capabilities spanning the entire economy-industry-company spectrum to deliver superior perspectives and insights to over 600 domestic and global clients, through a range of subscription products and customised solutions.
Disclaimer
A CRISIL IPO Grading is a one-time assessment and reflects CRISIL's current opinion on the fundamentals of the graded equity issue in relation to other listed equity securities in India. A CRISIL IPO Grading is neither an audit of the issuer by CRISIL nor is it a credit rating. Every CRISIL IPO Grading is based on the information provided by the issuer or obtained by CRISIL from sources it considers reliable. CRISIL does not guarantee the completeness or accuracy of the information on which the grading is based. A CRISIL IPO Grading is not a recommendation to buy / sell or hold the graded instrument; it does not comment on the issue price, future market price or suitability for a particular investor.
CRISIL is not responsible for any errors and especially states that it has no financial liability whatsoever to the subscribers / users / transmitters / distributors of CRISIL IPO Gradings. For information on any IPO grading assigned by CRISIL, please contact 'Client Servicing' at +91-22-66913561, or via e-mail: clientservicing@crisil.com.
For more information on CRISIL IPO Gradings, please visit http://www.crisil.com/ipo-gradings
This Press Release is transmitted to you for the sole purpose of dissemination through your newspaper / magazine / agency. The Press release may be used by you in full or in part without changing the meaning or context thereof but with due credit to CRISIL. However, CRISIL alone has the sole right of distribution of its Press Releases for consideration or otherwise through any media including websites, portals etc.
|
|
