CRISIL has assigned a CRISIL IPO Grade "3/5" (pronounced "three on five") to the proposed initial public offer of Ramky Infrastructure Limited (Ramky Infra). This grade indicates that the fundamentals of the issue are average relative to other listed equity securities in India. However, this grade is not an opinion on whether the issue price is appropriate in relation to the issue fundamentals. The offer price for the issue may be higher or lower than the level justified by its fundamentals. The grade is not a recommendation to buy / sell or hold the graded instrument, the graded instrument's future market price or its suitability for a particular investor.

The grading reflects Ramky Infra's good business position in the waste water segment of the construction business and its good order book position that stands at about 4.3 times its 2006-07 revenues. However, the grading is constrained by the fact that business operations in the Ramky group are not clearly delineated across the different group companies. The waste management business in the group is divided between Ramky Infra and Ramky Enviro Engineers Ltd, while the development business is divided between Ramky Infra and Ramky Estate and Farms Pvt Ltd. However, the boundaries of these divisions are fuzzy and still evolving. Moreover, the relatively higher margin portions of both these businesses are conducted outside Ramky Infra.

Although a related party policy exists (currently forms a part of share subscription agreement entered with the PE investor), awareness of

the same is low and a minimum threshold level has not yet been stipulated. However, the grading is significantly influenced by the stated intend of the board to increase awareness as well as stipulate the threshold level in the near future. Four of the five independent directors joined the board in October 2007. In this period their awareness of the business operations in general, and group company dynamics in particular, has been average.

The company will also have to significantly upgrade its information system to capture the substantial business opportunities available to it in the construction business over the medium term.

About the company and the issue
Ramky Infra, promoted by Mr. Alla Ayodhya Rami Reddy, was incorporated in April 1994 and began operations by being a small contractor in the water and waste water segment. The company has grown rapidly in the last 5 years on the back of large investments taking place in India.

Ramky Infra's revenues have registered a CAGR of 78 per cent over the last 3 years, with operating margins improving to 10.7 per cent from 7.4 per cent in 2004-05.

RIL aims to raise Rs 4 billion by this proposed public issue of 9,884,003 equity shares.

About CRISIL IPO Grading
CRISIL IPO (Initial Public Offering) Grading is an opinion on the fundamentals of the graded issue that reflects CRISIL's independence and expertise. This opinion is expressed as a relative assessment in relation to other listed equity securities in India. The assessment is based on a grading exercise carried out by industry specialists from CRISIL Research. A CRISIL IPO Grade 5/5 indicates strong fundamentals and a CRISIL IPO Grade 1/5 indicates poor fundamentals. CRISIL IPO Grading reflects its assessment of the graded company's equity fundamentals as distinct from an assessment of debt 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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