CARE or Credit Analysis & Research Limited is the 2nd largest credit rating agency in India. The Company filed for draft red herring prospectus (DRHP) with Securities Exchange Board of India to dilute its 25.22 percent of its equity share capital in the secondary market. All the proceeds money will be received by the selling shareholders.
CARE is not raising fresh capital from the issue; the IPO is a secondary offering. The issue is a share sale by some of its early investors such as Canara bank, Federal bank, IDBI bank, SBI and IL&FS. Some other investors included in this are ING Vysya, Tata Investments, and Milestone Private Equity Fund. The PE funds will also be selling some small stake of their holdings. The majority of the shares are held by IDBI Bank with 25.79 % stake, Canara Bank holds about 22.81%, SBI 9.61%, IL&FS 8.99 % and Federal Bank 6.2 %. PE investors such as Aditya Birla PE hold 4.27 %, Bajaj Holdings & Investment acquired 5.98% stake last year. Its peer ICRA and CRISIL are trading at a Price to earnings ratio of 29.95 times.
CARE posted rupees 176.62 Cr total incomes in FY 11 compared to 30.13 Cr in FY07 with a CAGR of 55.6 percent during the period. The Profit after Tax (PAT) has also increased to 91.05 Cr in FY 11 from rupees 13.56 Cr in FY 07 with a CAGR of 61% during the same period.
Bell the bull says: As of 31st March 2011 CARE has completed 9844 rating assignments and rated Rs 31190 bn of debt.