CRISIL and its Role in Indian Credit Rating System

• 7 December 2015 | 1443 Views | By Mint2Save

In the world of credit / grading agencies, CRISIL is prominent name for being amongst the pioneers in this field, globally. CRISIL stands for Credit Rating Information Services of India Limited, and it has Standard & Poor’s as its major shareholder. Thus, it is indirectly a part of the Big Three, when it comes to credit rating agencies. CRISIL provides high end research and credit ratings for several industries and covers almost economically important sectors. Visioning itself as a global analytical company, it is known to provide unbiased opinion and efficient solutions to its clients.

In this article, we shall explore the origins, growth, solutions and sectors covered by CRISIL.

Origin and Growth

It was established in 1987 in India and since then it working in a manner par excellence. With the efforts of experts endeavoring hard, applying their expertise in marketing, analysis of financial parameters, research, risk assessment with co-workers they have successfully established CRISIL well known for Integrity, Accountability and Excellence amongst their clients and others and, rated high with respect.

CRISIL, promoted by ICICI Ltd., Unit Trust of India and prominent financial institutions, is working since January 29,1987. Mr. N. Vughal and Mr. P.Shah were first Chairman and Managing Director, respectively and since then by virtue of their sincere, honest and hard work they have gradually developed them self and reach the helm and still continuing. By 1991 they earned fame (name and identity) in their field. They earned partnership with National Stock Exchange of India Ltd. And successfully achieve a mile stone by developing CRISIL 500 equity index.

Their IPO was launched in 1995 and was over subscribed by 2.5 times. This explicitly shows their popularity and faith amongst the investors. It also justifies the very need of an unbiased credit rating agency in India.

Since then, CRISIL has entered into many fields becoming a multi tasking agency indulged in finance and risk analysis, analysis and assessment of manufacturing organisation, financial institutions and so on.

Since 1996, they are doing grading of IPOs too, to serve the investors by educating them about the fundamentals of investment and depicting credibility of company bringing IPO. They are doing grading and rating of Mutual Funds, fixed deposits and other such schemes to benefit the investors.

CRISIL has been termed synonymous with company rating. It has rated over 14000 Indian companies and more than 45000 Small and Medium scale industries. Moreover, it has also rated on almost Indian mutual funds, calculating the risk factor involved over the investment. CRISIL’s mutual fund ranking list is most preferred among all financial advisors and investment planners.

Extending its roots beyond the Indian market, CRISIL has also teamed up with the top global banks to advise them for various investment and fund creation methods.

In the year 2015, they entered into the field of Environment too, for educating the common man about the need of conservation of environment, methods of doing so and, assisting in framing draft- policies for authorities’ duty fully responsible in this context. They have given much emphasis on the voluntary participation of employees of manufacturing units/companies so that reduction of pollution and conservation of environment begins from the root level.

Services Provided by CRISIL

In broader terms, CRISIL provides the following services.

1. Rating of Companies: CRISIL’s services are rendered by several industries and lenders, giving in-depth information about
2. Solutions for SME Industries: Owing to the large base and heterogenous nature of SME industries, CRISIL also a diverse portfolio of products for these industries.
3. Research: Having a deep involvement in the rating process, well developed research wing is an obvious for CRISIL. Industries, economies, capital markets, etc., are a few of the expertise areas in which CRISIL has been producing tremendous amount of dynamic content.
4. Analytics: CRISIL provides quantitative and qualitative analytics for several sectors and industries.
5. Risk Management Strategies: It also provides customised risk management tools, analytics and solutions, for several industries. From market risk, credit risk to the relatively newer operational risk.

Sectors Covered by CRISIL

As of today, CRISIL provides thorough coverage of industries belonging to these sectors:

1. Automobile
2. Industrial
3. Consumption Products
4. Energy
5. Financial
6. Infrastructure
7. IT, Media and Telecom
8. Travel, Health, Retail

The viability of credit rating agencies in defining an industry is quite critical for lenders, nations and investors. CRISIL has established itself as an inevitable agency in this sector. Though the opinions provided are not be considered as a sole judgement, but a good base for reasonable knowledge is being created.