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Our Bureau

Bhagwati Banquets has proposed an issue of 2.3 crore equity shares at Rs 30 per share aggregating Rs 69 crore.

Mumbai , Nov. 9

Crisil has assigned a grade of `1/5' to the proposed initial public offering of Bhagwati Banquets and Hotels Ltd indicating that the fundamentals of the issue are poor compared to other listed equity securities.

The company has proposed an issue of 2.3 crore equity shares at Rs 30 per share aggregating Rs 69 crore.

According to the rating agency, the business prospects of the company's planned 5-star hotel in Surat are significantly sub-par.

The grade also reflects the underdeveloped corporate governance system in the company and the current management team may need to be strengthened to carry out the plan of entering the 5-star hotel business.

However, Crisil has taken on board the successful track record of the promoters in the catering business in Ahmedabad. The rating agency has assigned a grade of 1/5 to the IPO of Celestial Labs Ltd.

The company will offer 50 lakh equity shares at a price of Rs 60 per share aggregating Rs 30 crore.

The grading reflects the very low predictability associated with the company's plans in new drug discovery and the lack of a clear operational roadmap (especially marketing) for the industrial enzymes business.

These activities are expected to consume over 75 per cent of the planned funds deployed by the company over the next 3 years.

The grading has also noted the successful track record of the company's IT projects business in the bioinformatics space.

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