Credit Rating Advisory

SEBI (Credit Rating Agencies) Regulations, 1999 (notified vide S.O. 594(E) dated 7 July 1999): the regulatory framework governing registration, obligations, and rating processes of Credit Rating Agencies (CRAs) operating in the Indian securities market. CRAs must hold SEBI registration and follow prescribed rating-process, monitoring, and disclosure norms before assigning or reviewing ratings on debt instruments, bank facilities, or corporate credit profiles. For MSME borrowers, the NSIC (National Small Industries Corporation) Performance and Credit Rating Scheme subsidises a substantial part of the rating fee charged by empanelled rating agencies — up to 75% of the fee, with the subsidy amount capped at one of ₹40,000, ₹30,000, or ₹25,000 depending on the applicant's annual turnover band. A favourable rating obtained under this SEBI-regulated framework improves a borrower's standing with banks and NBFCs for facility sanction and pricing, and — for eligible MSME units — makes the rating exercise itself substantially subsidised under the NSIC scheme. Advisory scope under this service covers assessment of rating readiness, coordination with an empanelled CRA, and preparation of the financial and operational disclosures the CRA's rating process requires under the SEBI 1999 Regulations.

A credit rating is an independent assessment of a company's creditworthiness — its ability and willingness to meet its debt obligations — issued by a rating agency registered with SEBI under the SEBI (Credit Rating Agencies) Regulations 1999. The rating is expressed as a symbol — investment grade or speculative — and it is the number the lending market uses to price the company's credit risk: banks, bond investors, suppliers and trade creditors all read it.

For a company, the rating is a working capital asset. A good rating lowers the interest rate on bank facilities, opens the bond market, and shortens negotiation with trade creditors. A rating process also forces the company's financials into the discipline of a structured review — projections, cash flows, management depth and industry position — which is itself valuable even when the rating is not what the management hoped.

The cost of avoiding a rating is invisible and permanent: the company borrows at the unrated price, and unrated borrowers are priced as riskier than their actual position justifies. Where a rating exists, the gap between the company's true position and its pricing is narrower; where it does not, the lender's assumption is the price.

This service is for companies preparing for their first rating or managing an existing one — for bank facilities, bonds, or counterparty credibility. We prepare the information memorandum and financial projections the agency needs, coordinate the rating process and the agency's queries, advise on the levers that improve the rating — capital structure, liquidity, working capital — and manage the annual surveillance that keeps the rating current.