REVIEW OF LITERATURE

It is a matter of sympathy toward the contributing group that so far no dynamic examination has
been completed on the assessment of execution persistency of Indian common assets. The
analyst has made a spearheading endeavor to assess the execution persistency of Indian common
assets. There are Indian studies which made an endeavor to rank the execution of plans drifted by
various shared asset associations.

Ravimohan R (2005) study found that as rating agencies gain experience, they involve their own
ways of looking at companies. It found CRISIL has a special group devoted to the task of
monitoring its rated portfolio ,compiling statistics and benchmarks for the rating process and it
found that forgetting the right rating for any issue, read CRISILs CEO and managing Directors
views which means that what actually they speak on the process and method of credit rating.
This study took the overall framework that Credit Rating involves four areas, Business,
Financial, Management and Project Risks.

Azhagaiah .R (2004) study in union territory of pond cherry reveals that the analysis of the
basis of investment shows that only 35% (53 out of 150) of the respondents depend on credit
rating for their investment in debt instruments. Among various CRAs, majority of the
respondents depend on a CRISIL than other rating Agencies like Care, ICRA etc.

Mohammed K(2003)Study was a case on the evaluation of performance of Credit Rating

Agencies in India and it found that CRISIL is ranked No.1 in accordance with the other CRAs in
India and Indian topmost Companies are rated by the CRISIL. On the basis of financial
profitability CRISIL is making the 20%-50% more than the other CRAs and it is making the
1800 + ratings and this study has found that SEBI played an important role in the guidelines for
the credit ratings agencies.

Chawla V (2004) study was also a case study on the critical analysis of CRAs in India and it
found that rating levels should be similar for all agencies and the rating agencies in India can
hardly achieve international performance standard and creditability. This study also found that
the all time influencing political factors are not at all considered in giving a rating to a
company .and sometimes the rating agency is bound to give the issuer company a good rating
irrespective of whether he issuer deserves the respective ratings or not .Credit ratings in recent
times is being looked upon as an important investment advisory function .In countries with
highly developed markets, such as the US ,and Japan, Though there is no statutory requirement
to have the securities rated, as high as 90% of the securities floated are voluntarily rated due to
the pressure exerted by the investors and bankers. In India, a beginning has been made with the
establishment of CRISIL and the RBI insisting that all commercial papers prior to their issue
must be rated. With the growth in the volume and depth of the capital markets and the increasing
knowledge and awareness of the investors, it can be expected that voluntary credit rating would
be on the increase.

Gupta R (2000) study took as the choice of variables an it found that turnover ratio plays a
major role in the rating the debentures. It carries discriminating capacity of about 16% and short
term liquidity and stability ratio does not play major role in rating and discriminating
debentures issues.