23 January 2008
Mumbai
CRISIL assigns highest IPO grade to Acme Tele Power Ltd.

Proposed public issue of 17,283,580 equity shares of face value Rs 2 targeted at an issue price in the range of Rs 800 to Rs 950 per share

CRISIL has assigned a CRISIL IPO Grade "5/5" (pronounced "five on five") to the proposed initial public offer of Acme Tele Power Ltd. (ATPL). This grade indicates that the fundamentals of the issue are strong relative to other listed equity securities in India.

CRISIL expects ATPL to report strong future growth while maintaining its track record of exceptional operating and financial performance. This reflects the company's solid market position, and its customers' focus on rapid expansion: ATPL's unique products are used by mobile operators to manage power consumption at cell sites in areas where the supply and quality of power is unreliable. With a market share of around 25 per cent across all cell site installations, ATPL enjoys leadership position in its segment. The company is thus well placed to benefit from the large investments planned by mobile operators in India, who propose to add almost half a million cell sites over the next five years.

ATPL has grown at remarkable pace over its relatively short history. CRISIL expects the company to continue its impressive growth in revenues and profits over the medium term, given its strong market position and the expected growth in mobile networks.

ATPL will also continue to benefit from the ongoing involvement of its promoter, Mr. Manoj Upadhyay, in new product research and development. The company's strong product development capability is a significant plus in a market that is highly competitive. To maintain its growth momentum, however, ATPL will also need to ensure that it retains its key employees: it has faced a fair amount of employee turnover in the past.

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About the company
ATPL, incorporated in January 2003, was promoted by Mr. Manoj Upadhyay. The proposed IPO is in the form of an offer for sale of 17.3 million shares by the promoters. Subsequent to the IPO, the promoters' stake in the company will reduce to 84.6 per cent from 94.7 per cent.

ATPL manufactures shelters, power regulation equipment, and air conditioners, which are used at mobile operators' cell sites. It has manufacturing facilities at Pantnagar in Uttaranchal and Parawanoo in Himachal Pradesh. Until March 2005, the company had an exclusive agreement with Bharti Airtel, the market leader in mobile telephony, under which it could not sell its products to other operators until it had satisfied Bharti Airtel's requirements; the business relationship between the two companies continues to be strong, long after the agreement has expired.

At the core of ATPL's offering to customers is a packaged solution, 'Green Shelter', consisting of:
- A fibreglass reinforced plastic or a nano-cooled enclosure that houses the BTS and other electronic equipment at cell sites
- A power management system called the power interface unit
- A thermal management system with phase change material, and
- Two air conditioners.
The utility of each of these products is distinct, and therefore the company also sells them individually.

ATPL also plans to launch a new gas-free compressor-less AC, and fuel cells, which produce energy more efficiently compared to diesel. Besides, the company intends to undertake geographical expansion into international markets.

For the year ended March 31, 2007, ATPL reported a net profit of Rs.2.30 billion on a turnover of Rs.6.43 billion, as compared with a net profit of Rs.1.16 billion and revenues of Rs.3.85 billion in the previous year.

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.

About CRISIL Limited
CRISIL is India's leading Ratings, Research, Risk and Policy Advisory Company.

About CRISIL Research
CRISIL Research is India's largest independent, integrated research house. We leverage our unique, integrated research platform and capabilities spanning the entire economy-industry-company spectrum to deliver superior perspectives and insights to over 600 domestic and global clients, through a range of subscription products and customised solutions.

Disclaimer
A CRISIL IPO Grading is a one-time assessment 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 the 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 issue price, future market price or suitability for a particular investor.

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January 23, 2008

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