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The article "This camel is worth the ride'' (Business Line, April 12) rightly brings out the fact that "equity by its very nature defies rating''. Investment in equities is prone to risks and an investor should do well to consult CAMEL (company, assets, management, earnings and liquidity), as provided in the prospectus.

Such information provided by issuers should be scrutinised by the regulator.

If a very low rating is given, it would lead to the IPO being not adequately subscribed. Also, the issuers of IPOs would be at the mercy of the rating agencies.

The hefty premium that the issuers place on the equities and the justification, therefore, while issuing IPOs, should also be examined.

T. R. Anandan

Coimbatore

Letters to the editor and contributions can be sent by e-mail to: bleditor@thehindu.co.in

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