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NEW DELHI: At a time when corporate governance is the most talked about issue, a Crisil study has found that governance standards are weak in nearly half of the companies, whose initial public offerings (IPOs) have been graded by credit rating agency.

“Of the 29 IPOs graded by Crisil since May 2007, corporate governance structures were found to be weak in close to 50 per cent of the companies evaluated,'' Crisil said in its research report.

“While not the sole determining factor, the quality of corporate governance as assessed by Crisil may significantly influence the Crisil IPO grade, beyond what the company's business prospects and financials may suggest,'' Crisil Research Head-Equities, Mr Chetan Majithia said.

Analysts at other grading agencies said that while assessing the fundamentals of the company, the issue of corporate governance is not a major determinant.

“Corporate governance is one of the criteria for arriving at the grade of the IPOs. We concentrate on the structure if we have any information about non-compliance issues or past conduct of the management,'' ICRA Managing Director, Mr Naresh Thakkar said . - PTI

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