Critical Evaluation of Scrapping of IPO Grading in India : An Expert Opinion

India had the unique distinction of being the only country where it was compulsory for the IPO's to be graded from any of the approved credit rating agency. This distinction was extinguished off from the Indian IPO market as mandatory in December 2013. Against this backdrop, we critically evaluate the scrapping of the process with the help of Delphi study. We show that, experts agree that grading is a worthwhile measure in the interest of the less informed investor (retail investor), though it has not proved to be worthwhile as shown in the findings of various researches done. With few changes in the grading process like grading fee to be borne out of the investor protection fund, some grading review mechanism post issue and some reflection of possible pricing of the issue, mandatory IPO grading can be successful