‡ A ë
  assesses the credit worthiness

‡ of an individual, corporation, or even a

country. Credit ratings are calculated from
financial history and current assets and
liabilities.

‡ A credit rating tells a lender or investor the

‡ probability of the subject being able to pay
‡ back a loan.
‡ A poor credit rating indicates a high risk of
‡ defaulting on a loan, and thus leads to high
‡ interest rates
‡ An assessment of the credit worthiness of
individuals
‡ and corporations. It is based upon the history of
borrowing and repayment, as well as the
availability
of assets and extent of liabilities.

‡ Credit is important since individuals and

corporations
‡ with poor credit will have difficulty finding
financing,and will most likely have to pay more
due to the riskof default
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‡ Credit rating is an assessment of the capacity
‡ of the issuer of debt security by an
independent agency, to pay interest and repay
principal as per the terms of issue of debt.

‡ The ratings are expressed in code numbers

‡ which can be easily comprehended by the lay
‡ investors.
‡ Credit rating, as exists in India, is done for a
‡ specific security and not for a company as a
‡ whole.
‡ A debt rating is not one time evaluation of
‡ credit risk, which can be regarded as valid for
‡ the entire life of the security.
‡
‡ A credit rating does not create fiduciary relatinship between the agency and
the users
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‡ Superior information
Low cost information
Basis for proper risk, return &

‡ Trade off
‡ Healthy discipline on corporate
‡ borrowers
‡ Formulation of public policy
‡ guidelines on Institutional
‡ investmen
 Benefits

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 Benefits to rated companie
‡ Sources of additional certification
Increase the investor population
Forewarns risk
Encourages financial Discipline
Merchant bankers job made easy
Foreign collaborations made easy
Benefits the industry as a whole
Low cost of borrowing
Rating as a marketing too
 CRA in India
‡ Credit Rating Information Services
‡ Limited (CRISIL)
‡ Investment Information and Credit
‡ Rating Agency of India (ICRA)
‡ Credit Analysis and research
‡ (CARE)
‡ Duff Phelps Credit Rating Pvt. Ltd(DCR
India
 
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‡ With over a 60% share of the Indian Ratings market,
‡ CRISIL Ratings is the agency of choice for issuers and
‡ investors.
‡ CRISIL Ratings is a full service rating agency that offers a
comprehensive range of rating services. CRISIL Ratings
provides the most reliable opinions on risk by combining
its understanding of risk and the science of building risk
frameworkswith a contextual understandinof business.

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 Investment Information and Credit
Rating Agency of India (ICRA
‡ ICRA Limited (an Associate of Moody's
‡ Investors Service) was incorporated in 1991 as
‡ an independent and professional company.
‡ ICRA is a leading provider of investment
‡ information and credit rating services in India.
‡ ICRA¶s major shareholders include Moody's
‡ Investors Service and leading Indian financial
‡ institutions and banks.
‡ With the growth and globalisation of the Indian
‡ capital markets leading to an exponential
surge in demand for professional credit risk
analysis, ICRA has been proactive in widening
its service offerings, executing assignments
including credit ratings, equity gradings,
specialised performance gradings and mandated
‡ In addition to being a leading credit
‡ rating agency with expertise in virtually
every sector of the Indian economy,
ICRA has broad-based its services for
the corporate and financial sectors, both
in India and overseas, and currently
offers its services under the following
banners:

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