credit rating 10081

8/3/2019 Credit Rating 10081

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Credit Rating

&Credit Rating Agencies

Presented by:-

Amit Aggarwal,Parmod,PARVEENA

Roll NO:-10031,10056,10012M.B.A 3rd sem.


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Credit Rating is an assessment of the capacity of the issuer of debt,securities by an independent agency to pay interest and repay the principalas per the terms of issue of debt.

A credit rating assesses the credit worthiness of an individual, corporation,

or even a country.

A credit rating tells a lender or investor the probability of the subject beingable to pay back a loan

Credit ratings are calculated from financial history and current assets andliabilities.

An assessment of the credit worthiness of individuals and corporations. It isbased upon the history of borrowing and repayment, as well as theavailability of assets and extent of liabilities


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Benefits To Investors Benefits To Rated Companies

Low Cost Information

Quick Investment Decisions Independent Investment Decision

Investors protection

Sources of additional certificate

Increases the investors population Foreworn risks

Encourages financial discipline

Foreign collaborations made easy

Benefits to the industry as a whole Rating as a marketing tool

Low cost of borrowing


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Company that assigns credit ratings for issuers of certaintypes of debt obligations as well as the debt instrumentsthemselves.

Also its an agency that performs the rating of debtinstruments.

CRA s scope at present is not only limited to the ratingof debts but they are also undertaking financial analysis &assessment of financial products , individuals ,Institutions& governments.

Credit Rating Agency


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CRA play a key role in the infrastructure of the modern

financial system. For investors, credit rating agencies increase the range of

investment alternatives and provide independent, easy-to-use

measurements of relative credit risk; this generally increases

the efficiency of the market, lowering costs for both borrowers

& lenders.

This in turn increases the total supply of risk capital in the

economy, leading to stronger growth. It also opens the capital

markets to categories of borrower who might otherwise be

shut out altogether: small governments, start up companies,hospitals, and universities.


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FUNCTION OF CREDIT RATING

FUNCTIONSOF CREDIT

RATING

SUPERIORINFORMATION

LOW COSTINFORMATION

BASIS FOR APROPER RISK

RETURNTRADE OFF

HEALTHYDISCIPLINE ON

CORPORATEBORROWERS

FORMULATIONOF PUBLIC

POLICY

GUIDELINES ONINSTITUTIONAL

INVESTMENT


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Credit Rating

Agency in India

CRISL ICRA CAREFitch RatingsIndia Private

Ltd.

BrickworkRatings India

Private Limited

CRISIL : Credit rating information services of India limited.

ICRE : Investment Information & credit rating agency of India limited.

CARE : Credit analysis & research limited.

Fitch ratings India private limited.(earlier-Duff & Phelps credit rating )

Fitch is the only international agency with a presence on the ground in

INDIA.


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The first credit agency setup on January 1, 1988, jointly started by ICICI and UTI

with an equity capital of Rs. 4 crores, as public Ltd company.

CRISIL is India's leading rating agency, and is the fourth largest in the world.

With over a 60% share of the Indian Ratings market, CRISIL Ratings is the agencyof choice for issuers and investors.

CRISIL Ratings is a full service rating agency that offers a comprehensive range ofrating services. CRISIL Ratings provides the most reliable opinions on risk bycombining its understanding of risk and the science of building risk frameworks,with a contextual understanding of business.

It offers a comprehensive range of integrated product & service offerings-real timenews, analysed data , incisive insights & opinions &expert advice-to enableinvestors , issuers , policy makers de-risk their business & financial decisionmaking , take informed investment decisions& develop workable solutions.

CRISL


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ICRA was set up by IFCI on 16th January 1991.

It is a public limited company with an authorized share capital of Rs.10

crores, Rs. 5 crores is paid up.

ICRAs major shareholders IFCI (26%), and the balance by UTI, LIC,

GIC, PNB, Central Bank of India, Bank of Baroda, UCO Bank and

banks (SBI) .

OBJECTIVE - to provide information & guidance to investors fordetermining the credit risk associated with a debt instrument

ICRA

Investment Information & credit rating agency of India


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It was setup by IDBI in collaboration with some banks & financial service

companies in NOV 1993.

It offers services such as credit rating of debentures/ preference shares / F.D /CP / information services & equity researchextensive study of the shares

listed on major stock exchanges through EIL (economy,industry,company)

analysis.

CARE

Credit analysis & research limited.


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credit rating 10081

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