Dimple Punjabi Sneha Rijhwani Harsha Matta Yashoda Gehani Deepa Sukhwani Sheetal Ludhwani Anisha Vaswani Dhirti

Makhija

Roll No.01 Roll No.02 Roll No.10 Roll No.11 Roll No.09 Roll No.40 Roll No.41 Roll No.42

CREDIT RATING AGENCIES

INDIAN CREDIT RATING AGENCIES

Credit Ratings Methodology

Business Risk Profile Analysis

Financial Risk Profile Analysis

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Validation of ³Company Position´ Trends Quality of Earnings & Analytical adjustments Peer Group Comparisons

Country Risk

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Political Economic Industry ± Specific factors Foreign exchange

Profitability / Peer Group Comparisons

Business Risk

Industry Factors

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Competitive Factors Market position Keys to Success Size Diversification Management

Company Position

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Industry Trends Industry Structure Market Size Growth Potential Competition Changing Technology

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Operating sources & uses Of liquidity Debt Characteristics Bank credit facilities

Accounting

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Accounting Regime Reporting & Disclosure Analytical adjustments

Liquidity / Short-term Factors

Financial Risk
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Governance Risk

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Focus on debt service capability Analytical distinctions with profitability Cash flow measures / ratios

Cash Flow Adequacy

Ownership Board of directors Management practices Financial Strategy Risk Tolerance Accounting Practices Internal controls

CRISIL(CREDIT RATING AND INFORMATION SERVICES OF INDIA LTD.) 

A global analytical company.  Incorporated in year 1987.  Provides ratings research and policy advisory services.  CRISIL is India's leading rating agency, and is the fourth largest in

the world. 
Offerings-real Timenews, Analysed data , incisive insights & opinions

&expert advice. 
So far CRISIL has 30000 debt instruments covering the entire debt

market.

DEBT OBLIGATIONS RATED BY CRISIL INCLUDE
Non convertible debentures/bonds/preference shares Commercial papers/certificate of deposits/short term debt Fixed deposits

Loans

Structured debts

FUNCTIONS OF CRISIL

CRISIL LONG TERM RATING SCALE
CRISIL AAA CRISIL AA CRISIL A CRISIL BBB CRISIL BB CRISIL B CRISIL C CRISIL D (Highest Safety) (High Safety) (Adequate Safety) (Moderate Safety) (Moderate Risk) (High Risk) (Very High Risk) (Default)

CRISIL SHORT TERM RATING SCALE

CRISIL P1
P2= SafetyLikely To More Vulnerable ToBe Default P5= Safety Regarding Timely Payment P4= ItInstruments Is Expected Short The On P3= Instruments Is Be Affected By ToOn Term Or P1= Is IsRegarding Timely Payment The Istrument Effects Strong.However, Safety Is Lower LessMaturity Conditions Circumstances Adverse Very Of Is Very Strong On Instruments Rated In P1 The Favourable Changing Than Instrument

CRISIL P2 CRISIL P3 CRISIL P4 CRISIL P5

ICRA : INVESTMENT INFORMATION & CREDIT RATING AGENCY OF INDIA LIMITED. 

ICRA was set up by IFCI on 16th january 1991.  A public limited company.  An authorized share capital of rs.10crores, rs. 5 crores is paid up.  To provide information & guidance to investors.  ICRA¶S major shareholders IFCI (26%).  Determines the credit risk associated with a debt instrument.

ICRA LONG TERM RATING SCALE

ICRA LAAA ICRA LAA
LD= Lowest Credit Rating & This LC= Poor Credit Quality Rating & This ICRA LA InstrumentProneVeryCreditProspectus Of & Has LimitedQuality Rating And Prospectus Of LBBB= Moderate Low Quality Rating LB= Risk CreditQuality Rating LBB= Inadequate Credit Quality LA= Adequate Credit Quality Rating LAA= High High Credit Risk Then Recovery Very Credit Instrument It ThisIt Carries Credit Credit Risk CarriesHighest Carries Higher LAAA=Carries High Quality Rating And Carries ICRA LBBB Risk &Average And It Credit Lowest Credit Risk It Average Credit Risk

ICRA LBB ICRA LB ICRA LC ICRA LD

ICRA SHORT TERM RATING SCALE

ICRA A1
A5= AverageCredit Quality Rating To Short Term A3= Moderate Credit Credit Quality A4= Risk Credit Quality Rating To Short Term A2= Lowest Prone ModerateQuality Rating Debt Instruments &Term Debt Instruments To A1= Highest& This Instrument Carries Higher DebtShort ShortCredit Policy Rating Instruments Rating To TermThis Instrument Carry Very To Prospects Of Recovery Instruments Debt Low Risk ThanDebt Instruments Credit Term A1 Short

ICRA A2 ICRA A3 ICRA A4 ICRA A5