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SME Ratings Overview

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CRISIL SME Rating indicates the SME's performance capability and financial strength. CRISIL SME Ratings are entity-specific ratings, unlike credit ratings, which are debt-obligation-specific.

CRISIL SME Rating indicates the SME's performance capability and financial strength. CRISIL SME Ratings are entity-specific ratings, unlike credit ratings, which are debt-obligation-specific.

CRISIL SME Rating reflects the level of creditworthiness of the SME, adjudged in relation to other SMEs.

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SME Ratings Overview SME Ratings Overview Presentation Transcript

  • CRISIL SME Ratings – An OverviewFor Internal2013 Only – Not For External Distribution © Use CRIISIL Ltd. All rights reserved.
  • About CRISIL SME Ratings CRISIL SME Rating indicates the SMEs performance capability and financial strength. CRISIL SME Ratings are entity-specific ratings, unlike credit ratings, which are debt-obligation-specific. CRISIL SME Rating reflects the level of creditworthiness of the SME, adjudged in For Internal2013 Only – Not For External Distribution © Use CRIISIL Ltd. All rights reserved. relation to other SMEs.
  • Highlights of CRISIL SME Ratings Entity rating: SME Ratings are entity specific Eligibility: All types of business enterprises, including public and private limited companies, cooperative societies, partnership firms, and sole proprietorships, are eligible for CRISIL SME Ratings. Registration as a micro and small enterprise is not required, as subsidy support from the government is not available for these For Internal2013 Only – Not For External Distribution ratings. © Use CRIISIL Ltd. All rights reserved. Surveillance based on specific requirement: A CRISIL SME rating is valid for one year from the date of the SME report issued by CRISIL, provided no significant changes/events occur during this period that could materially affect the business or financial parameters of the organisation. SMEs are encouraged to obtain rating reviews periodically, and CRISIL carries out reviews whenever requested by the SME or the lender.
  • CRISIL SME Ratings Product OfferingFor Internal2013 Only – Not For External Distribution © Use CRIISIL Ltd. All rights reserved.
  • Four key features of CRISIL SME ratings1. Affordability  MSMEs can avail of a rating for nominal fees  Government subsidises 75% of the rating fee For Internal2013 Only – Not For External Distribution © Use CRIISIL Ltd. All rights reserved.3. Simple one-time rating process
  • Innovation in Product Design: Devising a Separate Scale Simple one-time rating process Information requirement simplified Greater differentiation between stronger and weaker MSMEs For Internal2013 Only – Not For External Distribution Unique two dimensional scale © Use CRIISIL Ltd. All rights reserved. to evaluate – Performance capability (Business strength) – Financial strength
  • Rating Scales for SME Ratings SME Ratings uses a different scale than Bond scale ratings – Helps in peer comparisons SME Rating Scale Rating Definition For Internal2013 Only – Not For External Distribution © Use CRIISIL Ltd. All rights reserved. SME 1 Highest SME 2 High SME 3 Above Average SME 4 Average SME 5 Below Average  SE 2B stands for High Performance SME 6 Inadequate Capability and Moderate Financial SME 7 Poor Strength SME 8 Default
  • Rating Methodology for SME ratings BUSINESS RISKPerformance Capability For Internal2013 Only – Not For External Distribution Rating © Use CRIISIL Ltd. All rights reserved. MANAGEMENT OVERALL RISK CREDIT RISK Financial Strength FINANCIAL RISK PROJECT Rating RISK
  • What is a 1 performance capability rating? Performance rating of 1: – Entities rated 1 have a strong and mature business risk profile – Customer relationships are strong – Customer profile typically comprises strong entities For Internal2013 Only – Not For External Distribution © Use CRIISIL Ltd. All rights reserved. – Products of such entities have diverse end-user industries and thereby, the customer, and geographic concentration levels are also very low – Supplier relationships are also well maintained and such entities effectively manage their raw material sourcing – Managements of such entities are usually extremely dynamic and have been demonstrated an ability to grow the business well – A common thread across 1 rated entities, is the organizational structure and processes; these entities usually have a professional and experienced second tier management that has decision making capability and authority
  • Rating ProcessFor Internal2013 Only – Not For External Distribution © Use CRIISIL Ltd. All rights reserved.
  • Detailed Rating Report Designed to facilitate appraisal by banks CONTENTS • NSIC-CRISIL PERFORMANCE AND CREDIT RATING GRID • FACT SHEET • STRENGTH AND RISK FACTORS • MANAGEMENT PROFILE • FUTURE PLANS For Internal2013 Only – Not For External Distribution • OWNERSHIP PATTERN © Use CRIISIL Ltd. All rights reserved. • MANUFACTURING FACILITIES • BUSINESS PROFILE • PRODUCT PROFILE • CAPACITY UTILISATION • SUPPLIER INFORMATION • CUSTOMER INFORMATION • ORDERS IN HAND • MARKETING ARRANGEMENTS • OTHER INFORMATION • BANK AND INSURANCE DETAILS • FINANCIAL PERFORMANCE • PROFIT AND LOSS ACCOUNT • GRAPHS • BALANCE SHEET • KEY RATIOS • SITE VISIT INFORMATION • PROMOTERS’ DETAILS
  • Detailed Rating Report The report can be utilized for: – Negotiating better interest rates from banks – Applying for fresh loans or enhancement of limits with banks – Entering into joint ventures, new business relationships with other companies For Internal2013 Only – Not For External Distribution © Use CRIISIL Ltd. All rights reserved. – Self-analysis and improving the working of the company – Creating new export potential and also for expanding current export market – Applying for new projects or contracts
  • CRISIL SME Rating Fees Companies under operation: For Internal2013 Only – Not For External Distribution © Use CRIISIL Ltd. All rights reserved. * Special Concessional Fees are applicable for CRISILs partner MoU Bank customers and Industry Association members. The fees mentioned above are inclusive of all expenses CRISIL will incur in connection with the exercise. Please get in touch with CRISIL representatives for further details on Concessional fees
  • CRISIL SME Rating Fees Units with green-field projects: For Internal2013 Only – Not For External Distribution © Use CRIISIL Ltd. All rights reserved. * Note: Companies under operation refer to SSIs / SMEs with audited results of one complete year of operations. #: Concessional Fees are applicable for CRISILs partner MoU Bank customers and Industry Association members. The fees mentioned above are inclusive of all expenses CRISIL will incur in connection with the exercise. Please get in touch with CRISIL representatives for further details on Concessional fees.
  • Time to get an SME Rating for your business For Internal2013 Only – Not For External Distribution Now your business too can benefit by getting an SME Rating from CRISIL © Use CRIISIL Ltd. All rights reserved. If you are interested, click on the link below: http://crisil.com/ratings/interested-sme-ratings.html
  • About usCRISIL LimitedCRISIL is a global analytical company providing ratings, research, and risk and policy advisoryservices. We are Indias leading ratings agency. We are also the foremost provider of high-endresearch to the worlds largest banks and leading corporations. For Internal2013 Only – Not For External Distribution. © Use CRIISIL Ltd. All rights reserved.
  • www.crisil.comCRISIL Limited For Internal2013 Only – Not For External Distribution © Use CRIISIL Ltd. All rights reserved.