CRISIL Ratings List And Scale: Criteria For CRISIL Credit Rating

CRISIL or the Credit Rating and Information Services of India Limited is a premier Indian institution that rates the performances of many companies, industries and economy on  different parameters across the globe through its researches and innovative ideas. “Standard and Poor”, a division of the McGraw-Hill Company controls the majority of the holdings of CRISIL. They also provide customized individual research including investment decisions for clients.

CRISIL’s opinion on the probability of payment of principal and interest in time with the fulfillment of all other obligation is reflected on its rating.

It gives information on the reliability of a company to fulfill or default its future commitments upon specific or general obligation. The ratings are believed as independent, objective, and unbiased by all in the financial world.

CRISIL Credit Ratings List

The CRISIL ratings in the debt market cover:

  • Non-convertible bond or debenture or preference share.
  • Certificate of deposits, Commercial papers, Short-term debts.
  • Loans.
  • Fixed deposits.
  • Structured debts.

The some of the clienteles of CRISIL are:

  • BSE Sensex constituent 23 companies.
  • NSE Nifty constituent 39 companies.
  • 80 % of the equity market capitalization in India.

However, their rating does not indicate any -

  • Indication of general performance.
  • The correctness of the issue price of any equity share or bond.
  • The suitability of any investment or issue to the investor.
  • Any advice or recommendation of any kind.
  • Any kind of check on the correctness of account of the issuer.
  • No rating relates to other affiliated or associate companies.

CRISIL Ratings Scale

Crisil AAA (Highest Safety): Indicates highest degree of safety in discharging timely meeting its financial obligations. These are instruments with lowest risk.

Crisil AA (Highly Safe): Instruments with little risk but almost higher degree of safety.

Crisil A (Adequately Safe): This comes 3rd in this category in terms of safety and liquidity.

CRISIL BBB (Moderately safe): It carries moderate risk in meeting its credit obligation in time.

CRISIL BB (Moderate Risk): It carries moderate risk of default in meeting its credit obligation in time.

CRISIL B (High Risk): It carries high risk of default in meeting its credit obligation in time.

CRISIL C (Very High Risk): These instruments are better to be avoided.

CRISIL D (Default): These instruments must to be avoided.

Criteria For CRISIL Ratings

Rating criterions followed by CRISIL are based on the following parameters:

  • Market position: The present and future position of the market based on economic factors, share of market captured or can be capture in future by the company, its comp competitors, products, etc.
  • Management: The quality of the company’s management, directors or the officials in key positions.
  • Asset Quality: The types and proportion of asserts held by the company.
  • Capital Adequacy: The portion of its fixed assets, liquid asset, stocks, working capital adequacy, etc.
  • Resource Raising Ability:  The ability of the company raise fund when in need.
  • Earnings: The earning over past years and its consistency.
  • Liquidity and Asset Liability This indicates the quality of the assets and liabilities held by the company.

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