Rating

Agencies
 Contents

Introduction
Corporate governance in India
ICRA , CRISIL, CARE
Advantages

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1.
Intoduction
Rating Agencies

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 1.
CRISIL
Credit Rating Information Services Limited

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◎ CRISIL stands for Credit Rating Information
Services of India Limited and it was the first credit
rating agency set up in India in 1987.
◎ Today, CRISIL has become a global analytical
company that rates companies, researches the
markets and provides risk and policy advisory
services to its clients. At the time of incorporation,
the agency was promoted by ICICI Limited, UTI
and many such financial institutions.
◎ The majority shareholder of CRISIL is Standard &
Poor’s, one of the biggest credit rating agencies of
the world.
◎ The agency has rated around 5180 SMEs in India
and has issued in excess of 10,000 SME ratings
overall.
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 ICRA
• ICRA stands for Investment Information and Credit
Rating Agency Ltd.
• Promoted by IFCI,SBI,UTI(Unit Trust of
India),LIC,GIC(General Insurance
Corporation),HDFC,UCO bank etc.
• Moody’s Investors Service is the largest shareholder.
• Services rendered by ICRA are:
a. Rating services
b. Information services
c. Advisory services
MAJOR FACTORS FOR ANALYSIS

>OWNERSHIP:
Extent of shareholding by promoter
group
Extent of institutional shareholding
>GOVERNANCE STRUCTURE AND
MANAGEMENT:
Appropriates of the decision making
process
Quality of information submitted to board
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 BOARD STRUCTURE AND PROCESS

>Evaluating the performance of the top

management

>Balancing the rights and concerns of

share holders and other stake holders

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STAKE HOLDER RELATIONSHIP

◎Procedures for transfer and registration

of shares and payment of dividend
◎Company's responsiveness to investors
complaints
◎Timelines of release of any market
sensitive information

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TRANSPARENCY AND DISCLOSURES :

◎Changes in accounting policies

◎Notes accounts of materially significant
nature
◎Quality of discourses in management
discussion and analysis

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FINANCIAL DISCIPLINE :

◎Business segments in which the

company operates
◎ Extent of reliance on debt funding
◎Nature of transaction with subsidiaries

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ETHICAL PRACTIES

◎Comprehensiveness of code of ethics

and integrity
◎Extent to which compliance with the
code and guidelines is moruitored

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 CARE
• Credit Analysis and Research Ltd
• Incorporated in 1993, is based in Mumbai
• Deals with advisory services, information and credit rating.
• Promoted by UTI, Canara Bank, IDBI and many other reputed
banks and companies dealing with financial services.
• VARIOUS SERVICES OFFERED ARE:
a) Rating Services
b) Credit Reports
c) Valuations
d) Credit Appraisal
e) Reviewing Debt Market
• In 1994 commenced publication of ‘CAREVIEW’ a quarterly
journal of CARE Ratings.
CARE ,UNDER THE CGR EXERCISE, ASSESSES SEVEN
KEY PARAMETERS WHICH ARE IDENTIFIED AS UNDER:

◎Board composition and functioning

◎Ownership structure
◎Organisation structure and management
information system
◎Shareholder relationship
◎Disclosure and transparency
◎Financial prudence
◎Statutory nd regulation compliance
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