Fitch Ratings has assigned Rashtriya Ispat Nigam Limited's (RINL) proposed initial public offering (IPO) of 488.98m equity shares a grade of Fitch 4(ind), out of a maximum of Fitch 5(ind). The grade indicates above-average fundamentals of the issue relative to other listed equity securities in India. This grading does not comment on the suitability of the issue process or the adequacy of the price.
The grading reflects RINL's position as one of Indias largest producers of long product steel, the favourable medium- to long-term demand outlook for its products - driven by increasing infrastructure spend, and a healthy balance sheet. However, the economic slowdown in India in the recent past, especially the construction and infrastructure sectors, could reduce domestic long steel demand in the short-term.
The grading takes into account the fact that RINL is a public sector company and post IPO, the government of India (GoI) will remain the majority shareholder (a 90% stake) in the |
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