I.

INTRODUCTION

Credit rating is the symbolic indicator of the current opinion of rating agencies regarding the relative capability of issuer of debt instrument, to service the debt obligations as per contract. Credit Rating essentially indicates the credit worthiness of the borrowers and the probability that the borrowers will pay the interest and principal on due dates. A rated security is placed higher in the estimation of investors than an unrated security irrespective of better financial standing or reputation of the Issuer or Sponsor Company. Credit rating provides indicative guidance to the prospective investors on the degree of risk involved in the timely repayment of principal and interest. Thus credit rating is essentially the task of determining the strength and prospects of a security/instrument offered in the market by differentiating it from other securities/instruments with the help of predetermined standards called grades (typically these grades are

symbolically represented, viz. (A, AA, AAA etc). Credit rating is a source of reliable information for many users as rated instruments speak themselves about the soundness of the company and the strength of the instrument rated by the credit rating agency. Rating helps investors compare the issues by providing them a short and clear guide. Credit Rating gives superior information about the rated product and that too at low cost, which the investor otherwise would not be able to get so easily. Thus the investor can easily recognize the risk involved and the expected advantage in the instrument by looking at the symbols. The rationale of rating

service is to restore confidence in the minds of investors.

Credit Rating Agencies are thus essentially the corporations with specialized functions namely, assessment of the likelihood of the timely payments by an issuer on a financial obligation. In India the rating activities started with the incorporation of the Credit Rating Information Services of India Ltd. (CRISIL) in 1987 which commenced its operations of rating of companies 1987-1988 and in

was promoted by Industrial Credit and Investment Corporation of India

Ltd. (ICICI) and Unit Trust of India (UTI). The second rating agency Investment Information and Credit rating Agency of India Ltd. (ICRA) was incorporated in 1991 and was jointly sponsored by Industrial Finance Corporation of India (IFCI) and other financial institutions and banks. The other rating agency, Credit Analysis and Research Ltd. (CARE), incorporated in April 1993, is a credit rating information and advisory services company promoted by Industrial Development Bank of India (IDBI) jointly with Canara Bank, Unit Trust of India (UTI), private sector banks and financial services companies. Another Rating agency Onicra Credit Rating Agency of India Ltd., which was incorporated in 1993, is recognized as the pioneer of the concept of individual credit rating in India. Further Duff and Phelps Credit Rating (India) Private Ltd. (DCR) was established in 1996, known as Fitch Ratings India Private Ltd. One more rating agency SME Rating Agency of India Limited (SMERA), which was a joint venture of SIDBI, Dun & Bradstreet Information Services (D&B), Credit Information Bureau of India Limited (CIBIL), and other leading banks in the country, was established in 2005. A new rating agency, Brickwork Ratings (BWR) which is based in Bangalore was incorporated in 2007. Besides CRISIL (Standard & Poor), ICRA (Moodys), CARE and Fitch, Brickwork Ratings is the fifth Credit Rating Agency to be recognized by SEBI. which is presently

II.

OBJECTIVE OF THE PAPER

The main objective of the project is to compare credit rating agencies in rating methodology by verifying some of the common factors which determine the bond ratings. Consistency in rating methodology of each individual rating agency is assessed by taking companies belonging to same rating class (within group) including AAA, AA, A and BBB as sample.

III.

METHODOLOGY AND DATACOLLECTION

The project is based on the secondary data. It is a study of four old SEBI recognized rating agencies including CRISIL, ICRA, CARE and FITCH. The time period of the study is from April 2001 to March 2006. Bond rating methodology has been analyzed corresponding to eight variables, viz. four liquidity as well as solvency ratios and four profitability ratios. The shortterm liquidity ratios considered are Current ratio and Quick ratio whereas long-term

solvency ratios include Debt-equity ratio and Interest Coverage ratio. Further the profitability ratios selected include Return on Capital Employed, Return on Net Worth, Profit after tax/Total Income (PAT/TI), and Profit before depreciation, interest and tax/Total Income (PBDITA/TI).

These financial ratios are selected as these are commonly used by all the credit rating agencies and some of the previous studies also support these ratios. The data regarding various rating grades has been collected from the reports of the rating agencies including various issues of CRISIL Rating Scan, ICRA Rating Profile and CARE Rating View, websites of these rating agencies and PROWESS database of CMIE. Further, the

data relating to various financial ratios relating to the given period has also been collected from PROWESS database of CMIE. All the agencies use similar basic symbols from AAA to D to rate

long-term bonds and debentures, but in order to differentiate their symbols from one another, the agencies use various prefixes/suffixes. In the present study only the basic symbols have been used for the sake of simplicity. For all the rating grades F-values using Analysis of Variance (ANOVA) is calculated for all the eight financial ratios selected. 25 per cent of the total number of manufacturing and trading companies whose debentures and bonds are rated by each rating agency during the time period 2001-02 to 2005-06 are taken as sample. Companies selected for each rating agency are further divided into four groups viz. AAA, AA, A and BBB. These rating categories have been chosen in the light of the fact that majority of rated companies fall under these rating classes. The main core of the analysis is that in case of within group sample companies, variance in mean of ratios should be minimum. All calculations are done values

with the help of Statistical

Package for Social Sciences (SPSS) version 16.

CREDIT RATING AGENCIES IN INDIA

I.

INTRODUCTION

The institution of credit rating as a mechanism for addressing the considerable degree of information asymmetry in the financial markets has travelled a long way from the times of the US rail road companies in the mid-19 century. The need for an independent rating agency capable of assessing creditworthiness of borrowers was felt when corporate started mobilizing resources directly from savers instead of accessing it through banks which hitherto assumed the credit risk in such cases. The history of systematic credit rating, however, is a century old beginning with rating of US railroad bonds by John Moody in 1909. During this one century of growth and adaptation, CRAs progressed from rating simple debt products to rating complex derivatives to national economies and altered their business models to cover a range of activities/products. There are three major credit rating agencies operating internationally- Fitch, Standard and Poors, Moodys Investor Services: between them they share the bulk of the $5 billion rating business globally relegating other 60 plus local/regional players into just competitive fringes. In India, credit ratings started with the setting up of The Credit Rating Information Services of India (now CRISIL Limited) in 1987. CRISIL was promoted by premier financial institutions like ICICI, HDFC, UTI, SBI, LIC and Asian Development Bank. Now CRISIL is an S&P company with a majority shareholding. Apart from CRISIL four more rating agencies have been registered by SEBI in India. These are ICRA, promoted by IFCI and now controlled by Moodys, CARE promoted by IDBI, Fitch India a 100% subsidiary of Fitch, and a new born Brickworks. In India, CRAs that rate capital market instruments are governed by Securities and Exchange Board of India

(Credit Rating Agencies) Regulations, 1999. The regulation provides detailed requirements that a rating agency needs to fulfill to be registered with SEBI. TABLE 1: CRAs registered with SEBI.

Name of the CRA CRISIL ICRA CARE Fitch India Brickworks

Year of commencement of Operations 1988 1991 1993 1996 2008

In India, revenues of the three big rating agencies, CRISIL, ICRA and CARE have shown an upward trend given the increase in the usage of ratings over time.

II.

Functions of Credit Rating Agencies

The credit rating agencies in India offer varied services like mutual consulting services, which comprises of operation up gradation, risk management. They have special sections to carry on research and development work of the industries. They provide training to the employees and executives of the companies for better management. They examine the risk involved in a new project, chalk out plans to fight with the problem successfully and thus ameliorate the percentage of risk to a great extent. For this they carry on thorough research into the respective industry. They have started offering services to the mutual fund sector through the application of fund utilization

services. The major industries currently graded by the credit rating agencies include agriculture, health care industry, infrastructure, and maritime industry.

Non-rating related activities

CRAs often undertake a variety of non rating related activities. These include the following: 1. Economy and Company Research: Some Indian CRAs have set up research arms to complement their rating activities. These arms carry out research on the economy, industries and specific companies, and make the same available to external subscribers for a fee. In addition, they disseminate opinions on the performance of the economy or specific industries, available through releases to the media. The research would also be used internally by the

rating agencies for arriving at their rating opinions. SEBI permits CRAs to carry out this activity subject to relevant firewalls. 2. Risk consulting: With the application of Basel II regulations for banks, there is considerable demand for tools and products that will allow banks to compute their capital adequacy ratios under the revised guidelines. The risk consulting groups of credit rating agencies would leverage the agenciesunderstanding of credit risk to develop and provide the tools and data that banks would require. The products in this area include tools for internal ratings, operational risk evaluation, and overall capital calculation. 3. Funds research: Some CRAs have diversified from mutual fund ratings into mutual fund research. The services that are available under this head include fund rankings, performance attribution tools (to help users understand the reasons for fundsperformance), desktop tools, and fixed income research. 4. Advisory services: CRAs offer various kinds of advisory services, usually through dedicated advisory arms. Most of this is in the nature of developing policy frameworks, bid process management, public private partnership consulting, and creating an enabling environment for business in India and globally. 5. Knowledge Process Outsourcing: Some Indian CRAs (CRISIL and ICRA) have KPO arms that leverage their analytical skills and other process and manpower capabilities. These arms provide services to the CRAsaffiliates in developed markets, and also to other clients outside India.

III.

Who uses Credit Rating?

Investors
In absence of credit rating system, risk evaluation depends on name recognition. Credit rating helps investors in selecting appropriate instrument from broad spectrum of investment options. Banks use ratings of other banks for decisions regarding interbank lending, swap agreements, etc. Credit rating agencies also provides services like industry reports, corporate reports, seminars and open access to the analysts of the agencies.

Issuers
Compared to unrated securities, issuers of rated securities have access to much wider investor base & more faith is placed. Investor confidence enables issuers of highly rated instruments to access market even under adverse market conditions.

Intermediaries
Merchant bankers use rating for planning, pricing, underwriting, placement. Brokers and dealers in securities use rating as an input for their monitoring of risk exposures.

Regulators
Restrict entry to market of new issues rated bellow a particular grade. Prohibit investors from purchasing or holding of instruments rated bellow a particular level.

IV.

What can be Credit Rated?

INDIVIDUAL CORPORATE SOVEREIGN (i.e. A COUNTRY) FINANCIAL INSTRUMENTS BONDS BANK DEPOSITS COMMERCIAL PAPER Term Loans Preference Shares Secured Debt Unsecured Debt Securities

Ratings awarded by major Credit Rating Agencies

The Rating Process

COMPARISON STUDY OF INDIAS CREDIT RATING AGENCIES

CRISIL ICRA

1.CRISIL Company logo :

CRISIL was set up in the year 1987 in order to rate the firms and then entered into the field of assessment service for the banks. Highly skilled members manage the agency. Ms. Roopa Kudva who acts as the Managing Director and Chief Executive Officer of the company heads it. The company has set up large number of committees to look after dispersal of various services offered by the company for example, investor grievance committee, investment committee, rating committee, allotment committee, and compensation committee and so on.

I.

TYPES OF RATINGS

a. Credit Ratings
A CRISIL rating reflects CRISIL's current opinion on the relative likelihood of timely payment of interest and principal on the rated obligation. It is an unbiased, objective, and independent opinion as to the issuer's capacity to meet its financial obligations. So far, CRISIL has rated 30,000 debt instruments, covering the entire debt market. The debt obligations rated by CRISIL include: Non-convertible debentures/bonds/preference shares Commercial papers/certificates of deposits/short-term debt Fixed deposits Loans Structured debt

CRISIL Ratings clientele includes all the industry majors - 23 of the BSE Sensex constituent companies and 39 of the NSE Nifty constituent companies, accounting for 80 per cent of the equity market capitalization , are CRISIL's clients. CRISIL's credit ratings are: An opinion on probability of default on the rated obligation Forward looking Specific to the obligation being rated

CRISIL ratings are based on a robust and clearly articulated analytical framework, which ensure comprehensiveness, standardization, comparability, and effective communication of the ratings assigned and of every timely rating action. The assessment is based on the highest standards of independence and analytical rigour. CRISIL rates a wide range of entities, including: Industrial companies Banks Non-banking financial companies (NBFCs) Infrastructure entities Microfinance institutions Insurance companies Mutual funds State governments Urban local bodies

b. CRISIL REAL ESTATE STAR RATINGS

CRISIL Real Estate Star Ratings provide city specific all-round assessment of real estate projects and help buyers benchmark and identify quality projects within their city. CRISIL Real Estate Star Ratings address two critical needs in the realty sector: improved transparency and objective benchmarking of projects. The key factors evaluated in the Star Ratings process are Quality of legal documentation, Construction related risks, Financial flexibility/viability of the project besides the background, and Track record of the project sponsor.

Star Ratings is based on an eight-point scale that is specific to the city from City 7-Star, the highest, to City 1-Star, the lowest being 'Non-Deliverable Project'.

II.

Services OF CRISIL
IREVNA'S (NOW SUBSIDIERY PART OF CRISIL) services complement the onshore financial research teams of some of the world's largest financial institutions and insurance

companies. Its associates possess research expertise in avariety of asset classes. Irevna also provides comprehensive consulting and finance outsourcing services with solutions customized to meet the needs of various clients. Furthermore, insurance companies benefited from Irevna's services analysis. EQUITY RESEARCH: Irevna provides a full spectrum of equity research services, from searching and aggregating data to building models, generating ideas for onshore analysts and and consultants have

based on the foundation of reduced costs and value-added

writing indepth reports. Irevna pioneered outsourced equity research and analytics in 2001 and retains this vanguard position with over 50 of the world's leading buy- and sell-side financial institutions as clients. Credit Research: Irevna provides valuable credit research and credit sourcing services to its clients with capabilities across industries, lending types and geographies. Irevna has closely worked with financial institutions such as banks, thrifts, asset management firms, private equity firms and insurance companies. The credit research services offered include: Credit Sourcing Economic/Sector Assessments Financial Modeling Credit Risk Assessments Legal Due Diligence Credit Risk Monitoring Portfolio Monitoring

Retail Brokerage Research: Irevna's retail research services include end-to-end stock initiation reports, financial performance projections, publishing (industry, market and thematic) research reports, conducting comprehensive fundamental credit research, performing sovereign and economics research, drafting mutual/hedge fund performance reports, and creating newsletters, periodicals, and marketing presentations.

Derivatives Outsourcing: Irevna is at the forefront of derivatives research outsourcing. Clients depend on its deep knowledge of various derivative classes, including equity, credit, commodities, interest rate, and foreign exchange (FX) products, as well as structured and exotic offerings. Irevna's high-caliber associates allow it to offer an array of middle-office, product control, and derivatives IT solutions.

Financial Technology: Irevna's extensive experience is used to implement and maintain Complex financial technologies and systems through an amalgamation of technology, domain, and project management. This enables Irevna to deliver solutions of the highest quality and efficiency on deliverables such as.

FX and Economics: In order to negotiate and work within the highly volatile FX markets clients require partners who have a deep understanding of macroeconomics and that's where Irevna offers its full support. Irevna is highly skilled in creating quantitative models for FX forecasting, back testing and new product development. It also supports traders with trade book migration, IT and application support for algorithmic trading projects, and structured trade reviews of exotic fixed-income derivatives trades.

Quantitative Analytics: In a fast-changing and complex business environment, companies face many challenges. Irevna's quantitative analytics research team uses specialized statistical and pricing tools to help financial institutions assess risk and make well-informed decisions to maximize returns. Some of its services include derivatives pricing, index construction and maintenance, product development and research monetization.

Commodities Research:

With the nature of commodity markets being highly volatile, in-

depth commodities research is critical. Through Irevna, market participants are supported through comprehensive commodities research services such as price discovery using quantitative models, performance and volatility analytics.

Risk Management Analytics As a proficient risk management consultant Irevna's capabilities in the market, credit and operational domains is unmatched. Irevna's expertise lies in risk assessment and quantification, the development of tools and frameworks based on Basel II guidelines, stress testing, risk monitoring and reporting. With an array of services and offering. Irevna has fast become a leading risk management consultant.

Private Wealth Management In the current market scenario, providers of private wealth management off shoring services with specialized industry expertise and exposure to multiple asset classes have a critical role to play. Irevna's experience in diverse domains of financial outsourcing such as equity, fixed income, derivatives and risk management helps provide customized services to private wealth management firms.

Insurance Actuarial Services Irevna is a pioneer in insurance actuarial off shoring. Irevna's actuarial team is a mix of actuaries, student actuaries, CAs, MBAs, and statisticians. Irevna's clients include general and life insurance, reinsurance, and pension and investment management firms and provide them with effective problem-solving tools such as sophisticated actuarial models.

III.

RATING SYMBOLS USED BY CRISIL:

Instruments rated AAA are judged to offer the highest degree of safety, with regard to timely payment of financial obligations. Any adverse changes in circumstances are most unlikely to affect the payments on the instrument. Instruments rated AA are judged to offer a high degree of safety, with regard to timely payment of financial obligations. They differ Only marginally in safety from 'AAA' issues. Instruments rated 'A' are judged to offer an adequate degree of safety, with regard to timely payment of financial obligations. However, changes in circumstances can adversely affect such issues More than those in the higher rating categories. Instruments rated 'BBB' are judged to offer moderate safety, with regard to timely payment of financial obligations for the present; however, changing circumstances are more likely to lead to a weakened capacity to pay interest and repay principal than for Instruments in higher rating categories. Instruments rated 'BB' are judged to carry inadequate safety, with regard to timely payment of financial obligations; they are less likely to default in the immediate future than instruments in lower rating categories, but an adverse change in circumstances could lead to inadequate capacity to make payment on financial obligations. Instruments rated 'B' are judged to have high likelihood of default; while currently financial obligations are met, adverse business or economic conditions would lead to lack of ability or willingness to pay interest or principal. Instruments rated 'C' are judged to have factors present that make them vulnerable to default; timely payment of financial obligations is possible only if favorable circumstances continue. Instruments rated 'D' are in default or are expected to default on Scheduled payment dates. Instruments rated 'NM' have factors present in them, which render the outstanding rating meaningless. These include reorganization or liquidation of the issuer, the obligation being under dispute in a court of law or before a statutory authority.

AAA (Triple A) Highest Safety AA (Double A) High Safety

A Adequate Safety

BBB (Triple B) Moderate Safety

BB (Double B) Inadequate Safety

B High Risk C Substantial Risk D Default NM Not Meaningful

IMPORTANT:
1) CRISIL may apply '+ (plus) or '-' (minus) signs for ratings from 'AA' to 'C' to reflec comparative standing within the category.

2) CRISIL may assign rating outlooks for ratings from 'AAA' to 'B'. Ratings on Rating Watch will not carry outlooks. A rating outlook indicates the direction in which a rating may move over a medium-term horizon of one to two years. A rating outlook can be Positive, Stable, or Negative. A Positive' or 'Negative' rating outlook is not necessarily a precursor of a rating change. 3) The contents within parenthesis are a guide to the pronunciation of the rating symbols. 4) A suffix of r indicates investments carrying non-credit risk. The 'r' suffix indicates that payments on the rated instrument have significant risks other than credit risk. The terms of the instrument specify that the payments to investors will not be fixed, and could be linked to one or more external variables such as commodity prices, equity indices, or foreign exchange rates. This could result in variability in paymentsincluding possible material loss of principal-because of adverse movement in value of the external variables. The risk of such adverse movement in price/value is not addressed by the rating. 5) A suffix of (so) indicates instruments with structured obligation. A CRISIL rating on a structured obligation reflects CRISILs opinion on the degree of provided by the credit enhancement structure. The assessment takes into consideration any arrangement for payment on the instrument by an entity other than the issuer to fulfill the financial obligations on the instrument. It also takes into account any other means of enhancing the credit quality of the rated obligation. credit protection

2.ICRA Company logo :

ICRA Limited (formerly Investment Information and Credit Rating Agency of India Limited) was set up in 1991 by leading financial/investment institutions, commercial banks and financial services companies as an independent and professional Investment Information and Credit Rating Agency. Today, ICRA and its subsidiaries together form the ICRA Group of Companies (Group ICRA). ICRA is a Public Limited Company, with its shares listed on the Bombay Stock Exchange and the National Stock Exchange.

I.

Range of Services

a. Rating Services
As an early entrant in the Credit Rating business, ICRA Limited (ICRA) is one of the most experienced Credit Rating Agencies in the country today. ICRA rates rupee denominated debt instruments issued by manufacturing companies, commercial banks, non-banking finance companies, financial institutions, public sector undertakings and municipalities, among others. ICRA also rates structured obligations and sector-specific debt obligations such as instruments issued by Power, Telecom and Infrastructure companies. The other services offered include Corporate Governance Rating, Stakeholder Value and Governance Rating, Credit Risk Rating of Debt Mutual Funds, Rating of Claims Paying Ability of Insurance Companies, Project Finance Rating, and Line of Credit Rating.

b. Grading Services
The Grading Services offered by ICRA employ pioneering concepts and methodologies, and include Grading of: Initial Public Offers (IPOs); Microfinance Institutions (MFIs); Construction Entities; Real Estate Developers and Projects; Healthcare Entities; and Maritime Training Institutes. In IPO Grading, an ICRA-assigned IPO Grade represents a relative assessment of the fundamentals of the issue graded in relation to the universe of other listed equity securities in India. In MFI Grading, the focus of ICRAs grading exercise is on evaluating the candidate institutions business and financial risks. The Grading of Construction Entities seeks to provide an independent opinion on the quality of performance of the entities graded. Similarly, the Grading of Real Estate Developers and Projects seeks to make property buyers aware of the risks associated with real estate projects, and with the developers ability to deliver in accordance with the terms agreed. ICRAs Healthcare Grading present an independent opinion on the quality of care provided by healthcare entities. In the education sector, ICRA offers the innovative service of Grading of Maritime Training Institutes in India.

c. Consulting Services
ICRA Management Consulting Services Limited (IMaCS), a wholly-owned subsidiary of ICRA Limited, is a multi-line management and development consulting firm with a global Operating footprint. Regulation IMaCS offers Consulting Services in Strategy, Risk Management,

& Reform, Transaction Advisory, clientele includes Investors,

Development Consulting and Process and Financial Service Companies,

Reengineering. IMaCS Corporate Entities,

Banks

Institutional

Governments,

Regulators,

and Multilateral

Agencies. Besides India, IMaCS has consulting experience across 35 countries in South East Asia, Northern Asia, West Asia, Africa, Western Europe, and North America.

d. Software Development, Business Intelligence and Analytics and Engineering Services

ICRA Techno Analytics Limited (ICTEAS), a wholly-owned subsidiary of ICRA Limited, offers a complete portfolio of Information Technology (IT) solutions to meet the dynamic needs of present-day businesses. The services range from the traditional development of client-server, web-centric and mobile application The Engineering Division of ICTEAS offers multidisciplinary computer aided engineering design services. The activities cover design and drawing in the mechanical, civil/structural, electrical and instrumentation space. ICTEAS engineers and designers are well-versed in AutoCAD, MicroStation, PDS and Staad pro with experience in the Oil & Gas, Petrochemical and Power Sectors. The services range from providing Engineering Design Services to CAD

Vectorisation and Conversion ServicesICTEAS has two subsidiaries, ICRA Sapphire Inc. (ICSAP) and Axiom Technologies Limited (AXIOM). ICSAP is based in Connecticut, USA, while AXIOM operates out of Kolkata, India.

ICSAP, a wholly-owned subsidiary of ICTEAS, offers US clients a full array of leading edge Business Analytics and Software Development services backed by offshore teams, which work out of ICTEAS, Kolkata. This hybrid engagement model of onsite and offshore teams allows for seamless project management, execution and rapid offshore scaling of teams while bringing down development costs.

AXIOM,

wholly-owned

subsidiary

of

ICTEAS,

specializes

in

customization

and

implementation services on the Oracle E-Business Suite. Its services include process study, Fitment analysis, customization, implementation and post-implementation maintenance services. AXIOM focuses on the Financial Modules of the Oracle E-Business Suite, which include Order Management, General Ledger, Accounts Payable, Accounts Receivable, Cash Management, Purchasing and Inventory, Fixed Assets and Global Consolidation.

II.

RATING SYMBOLS USED BY ICRA:

LAAA LAA LA LBBB LBB LB LC LD The highest-credit-quality rating assigned by ICRA. The rated instrument carries the lowest credit risk The high-credit-quality rating assigned by ICRA. The rated instrument carries low credit risk. The adequate-credit-quality rating assigned by ICRA. The rated instrument carries average credit risk. The moderate-credit-quality rating assigned by ICRA. The rated instrument carries higher than average credit risk. The inadequate-credit-quality rating assigned by ICRA. The rated instrument carries high credit risk. The risk-prone-credit-quality rating assigned by ICRA. . The rated instrument carries very high credit risk. The poor-credit-quality rating assigned by ICRA. The rated instrument has limited prospects of recovery. The lowest-credit-quality rating assigned by ICRA. The rated instrument has very low prospects of recovery.

ICRAs Medium-Term Rating Scale (only for Public Deposits)

MAAA MAA MA MB MC MD The highest-credit-quality rating assigned by ICRA. The rated deposits programme carries the lowest credit risk The high-credit-quality rating assigned by ICRA. The rated deposits programme carries low credit risk. The adequate-credit-quality rating assigned by ICRA. The rated deposits programme carries average credit risk. The inadequate-credit-quality rating assigned by ICRA. The rated deposits programme carries high credit risk. The risk-prone-credit-quality rating assigned by ICRA. The rated deposits programme carries very high credit risk. The lowest-credit-quality rating assigned by ICRA. The rated instrument has very low prospects of recovery.

SPECIAL SYMBOLS
* # @ & % ^ fc SO S (P) ! Rating withdrawn Under rating watch Under rating watch with negative implications Under rating watch with developing implications Under rating watch with positive implications Rating Suspended Compulsorily Fully Convertible Bonds/Debentures SO Structured Obligation S Supported by Standby/Letter of Support The Letter 'P' in parenthesis after the rating symbol indicates that the debt instrument is being issued to raise resources by a new company for financing a new project and the rating assumes successful completion of the project ! Conditional Rating

3.CARE(Credit Analysis and RESEARCH Ltd.)

Credit Analysis & Research Ltd. (CARE Ratings) is a full service rating company that offers a wide range of rating and grading services across sectors. CARE has an unparallel depth of expertise. CARE Ratings methodologies are in line with the best international practices. CARE Ratings has completed over 8488 rating assignments having aggregate value of about Rs.26609 bn (as at Sep 30, 2010), since its inception in April 1993. CARE is recognised by Securities and Exchange Board of India (Sebi), Government of India (GoI) and Reserve Bank of India (RBI) etc.