1.

THE INTERNSHIPIN

CRISIL RATING FROM 8 MAY-23JUNE,2013

BY SUMIT

MALHOTRA BD TRAINEE

2.

CRISIL Businesses

1)Rating

2)Global research and analytics

3)Research

4)CRISIL risk and infrastructure solution

CRISIL’s SME Rating Servicesldh

.

4.

Key Messages

• Meaning of SME Rating

• About CRISIL

• SME rating products from CRISIL

• Benefits of rating to SMEs

• Are ratings helping SMEs? Feedback from a CRISIL survey

• Rating process

• Fee structure

5.

Meaning of SME Rating

• A reflection of level of creditworthiness and business

capabilities of an SME in relation to other SMEs

• Comprehensive analysis of financial strength as well as

performance capabilities

• Feedback from customers, suppliers and bankers - a 360

degree check

About CRISIL

7.

CRISIL’s Credentials

• India’s largest and most influential rating agency

• Officially recognized by RBI for Basel II ratings

• Subsidiary of Standard & Poor’s (the world’s leading rating

agency)

• Fourth largest credit rating agency in the world and largest in

India

• Enjoys very high credibility

• Pioneer and market leader

A rating that is highly trusted in the market

8.

CRISIL’s presence in SME sector

• Present in more than 100 locations across India and a 150

member strong team.

• Rated 5300 SMEs/SSIs.

• SME award with ICICI and CNBC (Emerging India Awards) –

35,000 entries. More than 1,30,000 entries received in 2007

9.

CRISIL’s presence……

• MOU with 38 banks – State Bank of India, Canara Bank, Punjab National Bank, Punjab& Sind Bank, Bank of Baroda, UCO Bank, Corporation Bank, Indian Overseas Bank, United Bank of India, SBM, SBT, State Bank of Indore, Allahabad Bank, Syndicate Bank, HDFC Bank, Federal Bank, Indian Bank, Dena Bank, Bank of India, Andhra Bank, State Bank of Hyderabad, Bank of Maharashtra, Union Bank of India and Vijaya Bank

• Central Bank, Punjab & Sind Bank and TMB accept rating.

• In dialogue with a number of other banks for similar tie-up

• Interest rate incentive from Canara Bank, BOI, UCO, PNB,United Bank, Union Bank, Corporation Bank, Vijaya Bank, Syndicate Bank and TMB ,Sbi,ICICI,Axisthank you

bank , HDFC bank,

10.

Why SME ratings now?

•SMEs’ keenness to benchmark themselves against their peers

- gives insight into the business

•Pressures of business growth and challenges of competition

•A powerful signal of transparency and credibility - exports

•Government support to make rating affordable

•‘Bankers to charge interest keeping in view the rating acquired

by SMEs’- Finance Ministers’ budget speech

11.

Period ending (months) 31-Mar-2013(3) 31-Dec-2012 31-Dec-2011

Net sales 1881.20 7366.00 6391.56

Other Income 37.60 202.60 227.53

Total Income 1918.80 7568.60 6619.09

Cost of goods sold 1233.30 4650.30 4129.23

OPBDIT 685.50 2918.30 2489.86

PAT 456.00 1928.80 1865.12

Gross Block - - -

Equity capital 70.20 70.20 70.06

EPS (Rs.) - 27.49 26.28

DPS (Rs.) - - -

BV (Rs.) - - -

P/E range (x) - 31.03 - 45.90 28.54 - 340.37

Debt / Equity (x) - - -

Operating margin (% of OI) 35.7 38.6 37.6

Net margin (% of OI) 23.8 25.5 28.2

http://www.myiris.co.in/shares/company/snapShotShow.php?icode=CRERATIS

brief financial of CRISIL

Rating benefits for SMEs

13.

CRISIL SME Rating – Benefits for SME/SSIs

For SMEs

• A trusted third party opinion

• Access to funding

Faster – time saving

Appropriate interest rate and other termss

• Credibility with business partners

New customers/Suppliers/Collaborators

• Tool for self improvement

Gives a comparative benchmark, strengths/weaknesses

• Visibility - Listing in CRISIL publications and website

14.

Rating services

CRISIL SME Rating Definition

SME 1 Highest

SME 2 High

SME 3 Above Average

SME 4 Average

SME 5 Below Average

SME 6 Inadequate

SME 7 Poor

SME 8 Default

SME/SSI - Green field projects rated on unique model

CRISIL’s SME Rating Scale for larger SMEs

NSIC-CRISIL Rating Scale for SSIs

High Moderate Low

Highest SE 1A SE 1B SE 1C

High SE 2A SE 2B SE 2C

Moderate SE 3A SE 3B SE 3C

Weak SE 4A SE 4B SE 4C

Poor SE 5A SE 5B SE 5CPer

form

ance

Cap

abili

ty

Financial Strength

Are ratings really helping SMEs?

16.

Are ratings really helping ?

•Some of the key conclusions were

– Ratings are helping SMEs/SSIs in a variety of ways including better

commercial terms as well as for credibility building

– Many SMEs are also using the rating report analysis as a tool for self

improvement

– CRISIL appears to be a strong first choice given its strong credibility in

Indian financial markets

17.

Feedback from Clients

• “We would be using the report bank appraisals and investors. We are quite satisfied with

the work done by CRISIL, and find the rating very good and useful.” – Xytel India Pvt. Ltd.

• “Thank you for a very positive report. The strengths and weakness of the company,

notes at the end of the table where necessary put the information in the right business

context , information about competitors, industry overview , graphical representation

give a true picture of what is happening. “ – STJ Electronics

• This rating comes as a real surprise to us, as initially we thought that it would be useful

only from the perspective of the banks. However, we got good response from market as

everybody is aware about the rating of Crisil. We are very happy and satisfied with the

way process was carried out.” – Lexi Pens

• “Its good, now we will work on this rating any try to improve upon the factors, as

mentioned by CRISIL.” – HGS (India) Limited

• “Overall we are happy with rating.” – CICO Technologies

• “The rating from CRISIL has helped us to negotiate better terms with our bankers. Rating

will help us in the growth process.”- Holostik

Rating process

19.

Collect & process information

Request for rating received

Site visit conducted by an associate

Preliminary information collected by

the associate

Papers sent to CRISIL

analysts

Step 1: Collect and process preliminary information

20.

Analyse and assign the rating

Papers received from associates

Information checked

by CRISIL analysts

Background research

is done

Management discussion over a

conference call

Report prepared and sent to a rating

committee

Rating is assigned by the committee

Step 2: Analyse and assign the rating

21.

Communicate & publish rating

Draft report sent to the client to check for

any factual inaccuracies

Step 3: Communication and publication of the rating

Changes, if any, received from the client and made

Final report, rating letter and a rating

certificate sent to the client

Rating is published on the website with the prior approval of the

client

22.

CRISIL Rating report

CONTENTSNSIC-CRISIL PERFORMANCE AND CREDIT RATING GRIDFACT SHEETSTRENGTH AND RISK FACTORSMANAGEMENT PROFILEFUTURE PLANSOWNERSHIP PATTERNMANUFACTURING FACILITIESBUSINESS PROFILEPRODUCT PROFILECAPACITY UTILISATIONSUPPLIER INFORMATIONCUSTOMER INFORMATIONORDERS IN HANDMARKETING ARRANGEMENTSOTHER INFORMATIONINDUSTRY REVIEWBANK AND INSURANCE DETAILSFINANCIAL PERFORMANCEPROFIT AND LOSS ACCOUNTGRAPHSBALANCE SHEETKEY RATIOSSITE VISIT INFORMATIONPROMOTERS’ DETAILS

23.

NSIC-CRISIL Fee Structure

Turnover (Rs lakh)

up to 50 50 - 200 above 200

Normal Concession Normal Concession Normal Concession

Rating Fees (Rs.) 40,000 27,040 45,000 36,000 60,000 48,000

Service Tax (Rs.) 4,944 3,342 5,562 4,450 7,416 5,933

Total Fees (Rs.) 44,944 30,382 50,562 40,450 67,416 53,933

Subsidy from NSIC

(Rs.)25,000 22,786 30,000 30,000 40,000 40,000

Amount payable by

SSIs (Rs.)19,944 7,596 20,562 10,450 27,416 13,933

Concessional fees** 9157  62% 12017  49% 16023  49%

Fee Structure

24.

SME Ratings Fee Structure(basel2 rating)

Turnover (Rs crore)

Up to 10 above 10 up to 25 above 25 up to 50 above 50 up to 75 above 75

Normal Con. Normal Con. Normal Con. Normal Con. Normal Con.

Rating Fees (Rs) 40,000 30,000 45,000 40,500 50,000 45,000 75,000 67,500 100,000 90,000

Service Tax (Rs) 4,944 3,708 5,562 5,006 6,180 5,562 9,270 8,343 12,360 11,124

Total Fees (Rs.) 44,944 33,708 50,562 45,506 56,180 50,562 84,270 75,843 112,360 101,124

Discount to

SMEs25% 10% 10% 10% 10%

Fee Structure

Scheme of MSME,NSIC for MSMe’s

1)Credit linked subsidy scheme

2)Credit guarantee for micro & small enterprises

3)Reimbursement scheme for ISO-9000/ISO-14001/HAPPC certification

26.

4)Purchase and price preference to MSME sector in govt. Purchase

5)MSE cluster Development programme

6)Lean Manufacturing Competitiveness Scheme

7)NSIC Raw Material Assistance Scheme for Procurement of raw material

27.

8) NSIC’s short term finance scheme for procurement of any raw material

9)NSIC’s government store purchase programme

10)NSIC’s Consortia/tender Marketing scheme

11)Credit facilitation through tie up arrangement with banks

12)NSIC’s info mediary service /b2b

13)Participation in exhibition domestic/overseas

14)Performance & credit rating scheme for MSMEs

28.

Learning from internship1)Be aggressive towards work2)Pitch where the person is interested3)Subsidy & free are those terms where every one thinks4)Give a quality service 5)Some times try to use the name of big fish in place of selling product6)Be confident7)Convincing power should be strong

29.

www.crisil.com

CRISIL Limited121-122, Andheri-Kurla RoadAndheri(E), Mumbai-400 093Tel-022-66913312/9322123311.Email-avarghese@crisil.com

30.

Thank you