Corporate Debt Ratings
An ICRA Rating is a symbolic indicator of ICRA's current opinion on the relative capability of the corporate entity concerned to timely service debts and obligations, with reference to the instrument Rated. The Rating is based on an objective analysis of the information and clarifications obtained from the entity, as also other sources considered reliable by ICRA. The independence and professional approach of ICRA ensure reliable, consistent and unbiased Ratings. Rating allow investors to factor credit risk in their investment decision. ICRA Rates long-term, medium-term, and short-term debt instruments. ICRA offers its Credit Rating services to a wide range of issuers including:

- Manufacturing companies
- Banks and financial institutions
- Infrastructure sector companies
- Service companies
- Municipal and other local bodies
- State governments
- Non-banking finance companies
- Small and medium sector entities

Rating Process
ICRA's Rating process is initiated on receipt of a formal request (or mandate) from the prospective issuer. A Rating team, which usually consists of two analysts with the expertise and skills required to evaluate the business of the issuer, is involved with the Rating assignment. An issuer is provided a list of information requirements and the broad framework for discussions. These requirements are worked out on the basis of ICRA's understanding of the issuer's business, and broadly cover all aspects that may have a bearing on the Rating. ICRA also draws on secondary sources of information, including its own Research Division, while working on the Rating assignment. The Rating involves assessment of a number of qualitative factors with a view to estimating the future earnings of the issuer. This requires extensive interactions with the issuer's management, specifically on subjects relating to plans, outlook, competitive position, and funding policies.

In the case of manufacturing companies, plant visits are made to gain a better understanding of the issuer's production process, make an assessment of the state of equipment and main facilities, evaluate the quality of technical personnel, and form an opinion on the key variables that influence the level, quality and cost of production. These visits also help in assessing the progress of projects under implementation. After completing the analysis, a Rating Report is prepared, which is then presented to the ICRA Rating Committee. A presentation on the issuer's business and management is also made by the Rating Team. The Rating Committee is the final authority for assigning Rating. The assigned Rating, along with the key issues, is communicated to the issuer's top management for acceptance. Non-accepted Rating are not disclosed and complete confidentiality is maintained on them unless such disclosure is required under any laws/regulations.

If the issuer does not find the Rating acceptable, it has a right to appeal for a review. Such reviews are usually taken up if the issuer provides certain fresh inputs. During a review, the issuer's response is presented to the Rating Committee. If the inputs and/or fresh clarifications so warrant, the Rating Committee would revise the initial Rating decision. As part of a mandatory surveillance process, ICRA monitors all accepted Ratings over the tenure of the Rated instruments. The Rating are generally reviewed once every year, unless the circumstances of the case warrant an earlier review. The Rating outstanding may be retained or revised (that is, upgraded or downgraded) on surveillance.

Methodology
ICRA considers all relevant factors that have a bearing on the future cash generation of the issuer. These factors include: industry characteristics, competitive position of the issuer, operational efficiency, management quality, commitment to new projects and other associate companies, and funding policies of the issuer. A detailed analysis of the past financial statements is made to assess performance under "real world" business dynamics. Estimates of future earnings under various sensitivity scenarios are drawn up and evaluated against the claims and obligations that require servicing over the tenure of the instrument being Rated. Primarily, it is the relative comfort level on the issuers' cash flows to service obligations that determines the Rating.