摘要：Many registered Credit Rating Agencies have endeavored to throw a glance into equity rating in the form of EPRA (earning prospects and risk analysis). In this paper, we have confined our study to assess the quality of grading of IPOs in the primary market. Rating Methodology of each rating agency appears to be different, though the basic stress parameters of all of them remain the same. All registered Rating agencies, including ICRA and CRISIL use financial ratios as one of the analytical tools for understanding the grading of IPO issues, thus, our paper has made an attempt to analyze the impact of financial ratios on Grading of initial equity issued by a company. The key objective of the paper is to identify some representative liquidity ratios and profitability ratios, which may capture the health of the IPO firms in terms of solvency and return earning capacity to provide a better guidance to the new investors and to investigate whether IPO grade can predict the health and performance of the issuer in terms of liquidity and profitability in post issue regime. We conducted our study on 35 graded IPO issues during the year 2011 to 2013.Fifteen profitability and liquidity ratios of the IPO companies are considered as independent variable. We applied Factor analysis of those independent variables to find out representative ratios affecting IPO grading. Moreover, Regression analysis has been used to identify the predictive ability of the representative financial ratios to explain IPO grading. We found that Factor score1, i.e., Profitability candidate and Factor score 2 i.e., Liquidity candidate and variable L8 i.e., interest coverage ratio can significantly affect IPO grading. These Factor scores along with interest coverage ratio can explain the quality of grading to some significant extent.
关键词：Multiple Regression analysis; Factor Analysis; IPO Grading; Financial Ratio
