The Grading Services offered by ICRA Nepal employ pioneering concepts and methodologies, and include Grading of Initial Public Offers (IPOs). Gradually, the Grading Services will also cover Microfinance Institutions (MFIs), Construction Entities, and Real Estate Developers and Projects. An ICRA Nepal IPO Grade represents a relative assessment of the “fundamentals” of the issue graded in relation to the universe of other equity securities listed on the Nepal Stock Exchange.
The methodologies vary in accordance with the nature of the service. For IPO Gradings, the factors analysed include, among others, the prospects of the industry in which the company operates, its competitive strengths, and its financial position. For the Grading of MFIs, the evaluation covers, among other factors, the MFI’s operating environment, governance structure, management and systems, scalability, asset quality, liquidity position, funding policies, capitalisation profile and profitability. For the Grading of Construction Entities and Real Estate Developers and Projects, all the relevant risks are analysed under the two broad categories of business risk and financial risk, with the objective being to provide lenders and sector participants with an independent opinion on the quality of the entity/project graded.