What is the rating of Securities in India?

RATING OF SECURITIES IN INDIA : The scope of credit rating is limited in Indian
context, generally to debt instruments such as Bonds, Debentures, Commercial paper,
fixed deposits and mutual funds. It is the instrument which is rated and not the company.
In other words, credit quality is not general evaluation of issuing company. However, the
issuer company gets strength and credibility with the grade of rating awarded to the credit
instrument it intends to issue to public for raising funds. Rating reflects upon the issuer’s
strength and soundness of operations, management, organization behaviour and
expresses a view on its prospective composite performance and also the organizational
behaviour based on the study of past results. The rating may differ for different instruments
issued by the same company, within the same time span.
In India, the Credit Rating and Information Services of India Ltd. (CRISIL) was set up as
the first rating agency in 1987. The Investment Information and Credit Rating Agency of
India Ltd. (ICRA) was set up in 1991 and Credit Analysis & Research Ltd. (CARE) was set
up in 1994. The ownership pattern of all the three Agencies is institutional.