credit rating agencies

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SMT. CHANDIBAI HIMATHMAL MANSUKHANI COLLEGE
Class S.Y.BFM Group 4 Subject Financial
Services Semester IV Date 16th December,2011
Submitted to Prof. Girish Bhavnani
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Group Members
Dimple Punjabi
Roll No.01 Sneha Rijhwani
Roll No.02 Harsha Matta
Roll No.10 Yashoda Gehani
Roll No.11 Deepa Sukhwani
Roll No.09 Sheetal
Ludhwani Roll
No.40 Anisha Vaswani
Roll No.41 Dhirti Makhija
Roll No.42
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CREDIT RATING AGENCIES
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INDIAN CREDIT RATING AGENCIES
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Credit Ratings Methodology
Business Risk Profile Analysis
Financial Risk Profile Analysis
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Country Risk

• Political
• Economic
• Industry Specific factors
• Foreign exchange

• Validation of Company
• Position
• Trends
• Quality of Earnings
• Analytical adjustments
• Peer Group Comparisons

Industry Factors
Business Risk
Profitability / Peer Group Comparisons

• Industry Trends
• Industry Structure
• Market Size
• Growth Potential
• Competition
• Changing Technology

• Competitive Factors
• Market position
• Keys to Success
• Size
• Diversification
• Management

Company Position
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• Operating sources uses
• Of liquidity
• Debt Characteristics
• Bank credit facilities

Accounting

• Accounting Regime
• Reporting Disclosure
• Analytical adjustments

Financial Risk
Governance Risk
Liquidity / Short-term Factors

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

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

Cash Flow Adequacy
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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.

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DEBT OBLIGATIONS RATED BY CRISIL INCLUDE
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FUNCTIONS OF CRISIL
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CRISIL LONG TERM RATING SCALE
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CRISIL SHORT TERM RATING SCALE
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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.
• ICRAS major shareholders IFCI (26).
• Determines the credit risk associated with a debt
  instrument.

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ICRA LONG TERM RATING SCALE
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ICRA SHORT TERM RATING SCALE
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