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Prepared By:VANZARA FARHANA
VAISHNAV MEGHAL
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INTRODUCTION OF CREDIT RATING
CRISIL: Credit Rating Information Service Of IndiaLtd.
an evaluation of the credit worthiness of a
debtor determined by credit ratings agencies
DEFINITION:
An assessment of the credit worthiness of aborrower in general terms or with respect to aparticular debt or financial obligation.
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CREDIT RATING AGENCY IN
INDIACRISIL (CREDIT RATING INFO &SERVICE OF INDIA LTD.)
CARE (CREDIT ANALYSIS &RESEARCH LTD.)
ICRA (INVESTMENT INFO & CREDITAGENCY OF INDIA LTD.)
FITCH RATING INDIA PVT. LTD.
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ABOUT CRISIL A global analytical company Incorporated in 1987
Provides ratings, research, and risk and policyadvisory services.
India's 1stlargest.
Provider of high-end research to the world's largestbanks and leading corporations.
CRISIL's majority shareholder is Standard and Poor's(S&P)
rated 30,000 debt instruments, covering the entiredebt market
clients includes all the industry majors - 23 of the BSESensex constituent companies and 39 of the NSE Niftyconstituent companies,
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AIM OF CRISIL To assist both individual and institutional investors in
making investment decisions in fixed interestsecurities;
To guide the investors as to the risk of timely payment
of interest and principal on a particular debtinstrument;
To help the companies to raise funds from a largenumber of investors in larger amounts at a lesser cost;
To create awareness of the concept of credit ratingsamongst corporations, merchant bankers, brokers,regulatory authorities and help in creatingenvironment that facilitates the debt rating;
To provide regulators with a market-driven system inorder to ensure discipline and a healthy growth ofcapital markets.
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CRISIL Businesses
Ratings
Global Research & Analytics: (Irevna,Pipal Research)
Research
CRISIL Risk and Infrastructure Solutions(CRIS)
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CREDIT RATING METHODOLOGY
Business analysis: covers an analysis of industryrisk, market position in country, operatingefficiency of company & legal position.
Financial analysis: covers analysis of accounting
quality, earning protection, cash flow adequacy& financial flexibility.
Management evaluation: study track record ofmgmts capacity to overcome adversesituations, goals, philosophy & strategies.
Fundamental analysis: analysis of liquidity mgmt,assets quality, profitability and interest and taxsensitivity.
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TYPES OF RATING
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FUNCTION OF CRISIL
Credit Rating Service
Advisory Services
Research & InformationService
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Remarks Debenture FixedDeposit
StructuredObligation
Short-termSafety
HighestSafety
AAA FAAA AAA(So) P1(Verystrongsafety)
High Safety AA FAA AA(So) P2(Verysafety)
AdequateSafety
A FA A(So) P3(Adequate safety)
ModerateSafety
BBB - BBB(So) P4(Minimalsafety)
Inadequate
Safety
BB FB BB(So) P5(Default)
High Risk B FC B(So)
SubstantialRisk
C - C(So)
In default D FD D(So)
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