However, the grade is not an opinion on whether the issue price is appropriate in relation to the issue fundamentals.
CRISIL's grading reflects the challenges that Sejal Architectural is likely to face as a glass processor in setting up a largely debt-funded float glass project (float glass project cost is about Rs 4.8 billion with debt funding of about Rs 3.2 billion).
The float glass industry, apart from being capital-intensive, is dominated by a few large global players and is characterised by profit cyclicality. Sejal Architectural has done well to become one of the five leading glass-processing companies in India. However, its ability to stabilise and operate a float glass plant, as well as sell about six times its current volume of glass, remains to be seen.
The grading also reflects Sejal Architectural's below-average corporate governance structure.