Mumbai, October 05, 2006
CRISIL IPO grade 1/5 assigned to the IPO of SVP Industries Ltd.
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Proposed public issue of 4,470,590 equity shares at a targeted price of Rs 85 - Rs 100 per share aggregating Rs 380-447 million

CRISIL has assigned a CRISIL IPO grade "1/5" (pronounced "one on five") to the proposed initial public offer of SVP Industries Ltd (SVPIL). This grade indicates that the fundamentals of the issue are poor relative to other listed equity securities in India.

The grading reflects the company's long standing presence in the country liquor business in Uttar Pradesh (UP) and its plans of growing into the IMFL segment of the liquor business. The grading is constrained by SVPIL's management and governance structure, which is characterized by the presence of a large number of the promoter's extended family on the company's board. Moreover, Ajay Swarup, who runs the operations of SVPIL has significant economic interests in two other companies that are in the same line of business as SVPIL is, in the states of Rajasthan and Haryana. The grading also reflects the fact that SVPIL will be a late entrant into the fast consolidating IMFL industry, which is characterized by high branding expenses and extended gestation period for new brands.

About the company
SVP Industries (SVPIL) was originally incorporated under the name of Uttar Pradesh Pulp and Paper Mills Ltd. on October 24, 1961 by the late Braham Swarup. It was re-christened SVP Industries Ltd. with effect from June 2004. SVPIL is presently engaged in the business of manufacturing, marketing and sale of country liquor and industrial alcohol. Besides this, SVPIL also undertakes third-party contract manufacturing and bottling of IMFL for the United Breweries group. SVPIL carries out manufacturing activity through its unit - Sir Shadilal Distillery & Chemical Works, situated in district Muzaffarnagar, UP. At present, the company has an installed capacity to manufacture 200 lakh bulk litres (BL) per annum of rectified spirit and a license to sell 86 lakh BL per annum of potable alcohol.

For the year ended March 2006, SVPIL reported a net profit of Rs 53.7 million on an operating income of Rs 1037.8 million, as compared to that of Rs 14.6 million on an operating income of Rs 771.7 million in 2004-05.

About CRISIL's IPO grading
A CRISIL IPO grade represents CRISIL's overall assessment of the fundamentals of the issue graded in relation to other listed equity securities in India. CRISIL IPO gradings are assigned on a five-point scale from 1 to 5, with a CRISIL IPO Grade 5/5 indicating strong fundamentals and a CRISIL IPO Grade 1/5 indicating weak fundamentals. A CRISIL IPO grade should not be construed to mean a comment on the price of the graded security nor is it a recommendation to invest or not to invest in the graded security..

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Disclaimer A CRISIL IPO grading is a one-time exercise and reflects CRISIL's current opinion on the fundamentals of the graded equity issue in relation to other listed equity securities in India. A CRISIL IPO grading is neither an audit of the issuer by CRISIL nor is it a credit rating. Every CRISIL IPO grading is based on information provided by the issuer or obtained by CRISIL from sources it considers reliable. CRISIL does not guarantee the completeness or accuracy of the information on which the grading is based. A CRISIL IPO grading is not a recommendation to buy / sell or hold the graded instrument; it does not comment on the market price or suitability for a particular investor.

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October 05, 2006