CARE has assigned a `CARE IPO Grade 4` to the proposed initial public offer (IPO) of Cox & Kings (India), indicating above average fundamentals.

The company has proposed a public issue of 15.45 million equity shares of face value of Rs 10 each at a price to be decided by 100% book building process.

Rating Rationale:

The grading derives strength from the long track record of the company, experienced promoters, diversified operations and recognised brand name in domestic and international markets. The ratings also take into account improved operational performance over the years leading to steady growth in gross margins and presence of subsidiaries and associate companies across the globe, facilitating synergy of operations.

The grading is constrained by increasing debt profile of the Company, fragmented nature of the domestic travel industry and its correlation with the economic growth.

The ability of C&K to maintain growth and protect margins under the present downturn in tourism industry consequent to global financial turmoil and swine flu scare remains the key grading sensitivity.

Company Profile:

Cox & Kings (India), established in India in 1939, is one of the longest running travel companies in the world with presence in UK, Australia, New Zealand, Japan, US, UAE and Singapore through its subsidiaries. C&K basically operates in three main verticals/product lines – leisure, corporate travel and forex. It offers products like MICE (meetings, incentives, conferences and exhibitions), FITs (free individual travellers), Groups and Trade Fairs across all the verticals.

With the acquisition of Quoprro Global Services Private, C&K entered into the business of visa processing. And with recent Joint Venture with IRCTC, C&K entered into the business of luxury train-based tourism.

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