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Kochi Jan. 18 Crisil has assigned three on five grade to the proposed V Guard IPO, which is likely to hit the markets towards the end of February.

V Guard proposes to offer 80-lakh equity shares with a face value of Rs 10 with a targeted issue size of Rs 68-70 crore.

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 stabilisers manufacture, which has ensured high margins in the past years, a press release from the company said.

However, the company has had limited success in products other than stabilisers and its move into the fragmented and price sensitive LT power cable segment is expected to prove challenging, the company added.

V Guard’s proposed expansion into the Northern market would be in a new and innovative manner since it does not have relationships with established contract manufacturers. The company has evolved an aggressive and dynamic management model for its foray into the North Indian markets.

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