A SYNOPSIS REPORT ON

A STUDY ON

IMPACT OF CREDIT RATING ON COMPAN

BY

MANUBOLU. SURENDRANADH REDDY

ROLL.NO. 1157-1967-2044

Under the guidance of

Mrs. R. SWATI

Assistant professor

Synopsis Submitted in Partial fulfillment for the award of Degree of

MASTER OF BUSINESS ADMINISTRATION

DEPARTMENT OF BUSINESS ADMINSTRATION

PRAGATI MAHA VIDYALAYA P.G.
COLLEGE
(AFFILIATED TO OSMANIA UNIVERSITY) HANUMAN
TEKDI, HYDERABAD, TELANGANA.
2019-2021
 1. INTRODUCTION
Credit ratings can determine whether you qualify for financing. Your credit rating is a
measurement of your past repayment history on debts including credit cards and personal loans,
which gives lenders insight into the likelihood of you paying them back if they approve you for a
loan. If you maintain a high credit rating, the likelihood of banks and lenders approving you for
financing are high. A poor credit rating may represent an inability to repay debt and limit your
financing options. Credit ratings and credit scores often work interchangeably. For example,
most businesses receive credit ratings expressed as letter grades (such as triple-A, double-A or
A) from agencies such as Standard & Poor’s, while you receive a rating expressed as a score,
known as a FICO score. The most common factors that affect your credit score are the length of
your credit history, past repayment history and your credit utilization. The three credit reporting
agencies take that information and build your credit profile, which will determine your overall
credit rating and score.

Definition of Credit Rating:

A credit rating is a process of assessing the credit risk i.e. the risk of default associated with the
specific financial instrument, or, the term may also be stated as an assessment of the credit
worthiness (i.e. the ability to meet financial obligations) of an issuer. So, rating is some sort of
evaluation of the capacity of timely payment of interest and principal

What is the difference between credit ratings and credit score?

A credit rating is given to a company, organization or a government body by calculating its
ability to repay the debt and to predict the likelihood of default. On the other hand, a credit score
is given to an individual after taking a look at his credit history and repayment behavior.

How do Credit Ratings Work in India?

As a matter of fact, every credit rating agency has their algorithm to evaluate the credit rating.
However, the major factors are credit history, credit type and duration, credit utilization, credit
exposure, etc. Every month, these credit rating agencies collect credit information from partner
banks and other financial institutions. Once the request for credit rating has been made, these
agencies dig out the information and prepare a report based on such factors. Based on that report,
they grade every individual or company and give them a credit rating. This rating is used by
banks, financial institutions and investors to make a decision of investing money, buying bonds
or giving loan or credit card. The better is the rating; more are the chances of getting money at
payable interest rates.
1.1.2TYPES OF CREDIT RATINGS:

a. Sovereign credit ratings

A sovereign credit rating is that the credit rating of a sovereign entity, sort of a national
government. The sovereign credit rating indicates the danger level of the investing environment
of a rustic and is employed by investors when looking to take a position especially jurisdictions,
and also takes into account political risk.

b. Corporate credit ratings

A corporate credit rating is an opinion of workplace regarding the likelihood that a corporation
will fully meet its financial obligations as they're available due. A company’s corporate credit
rating indicates its relative ability to pay its creditors. It is important to stay in mind that
corporate credit ratings are an opinion, not a fact.

Understanding Corporate Credit Ratings

Standard & Poor's (S&P), Moody’s, and Fitch are the three main providers of corporate credit
ratings. Each agency has its own scoring system that doesn't necessarily correspond to the
opposite agencies' rating scale, but they're all similar. For example, Standard & Poor’s uses
"AAA" for the highest credit quality with the lowest credit risk, "AA" for the next best, followed
by "A," then "BBB" for satisfactory credit.

Credit Rating Agencies

Credit rating constitutes an opinion of a rating agency that evaluates the essential credit strength
of any customer and his capability to completely and on time meet his debt commitments. Credit
Rating specifies the credit praiseworthiness of the borrowers and therefore the possibility of the
borrowers can pay back the interest and principal on payable dates.

Origin of Credit Rating Agencies

The journey of Credit Rating Agency started from 1841 by Lewis Tappan in NY City. It was
then gained by Robert Dun, who published its first ratings guide in 1859. Another early agency,
John Bradstreet, started in 1849 and published a rating guide in 1857.

Credit rating agencies took birth within the US within the early 1900s, when ratings began to be
practical to securities, exclusively those associated with the railroad bond market. In the United
States, the construction of wide-ranging railroad systems had led to the enlargement of corporate
bond issues to finance them, and consequently a bond market several times superior than in other
countries. Following the 1907 financial crisis, demand started increasing for the autonomous
market information, especially for independent analyses of bond creditworthiness. In 1909,
securities analyst John Moody issued a publication focused solely on railroad bonds. His ratings
are the primary one to be published extensively in a simple to urge to format, and actually his
company was the primary one to charge subscription fees to investors.
Modus operandi Credit Rating Agencies
Credit rating agencies assign ratings to an organization or an entity. The entities that are rated by
credit rating agencies comprise companies, state governments, non-profit organizations,
countries, securities, special purpose entities, and local governmental bodies. Credit rating
agencies take into consideration several factors like the financial statements, level and type of
debt, lending and borrowing history, ability to repay the debt, and the past debts of the entity
before rating their credit. Once a credit rating agency rates the entities, it provides additional
inputs to the investor following which the investor analyses and takes a sound investment
decision. Poor credit rating indicates that the entity is at a high risk of defaulting. The credit
ratings that are given to the entities serve as a benchmark for financial market regulations. Credit
ratings are published by agencies like Moody’s Investors Service and Standard and Poor’s (S&P)
based on detailed analysis.

Credit Rating Agencies in India:

1. Credit Rating Information Services of India Limited (CRISIL)

CRISIL is one of the oldest credit rating agencies in India. It was launched in the country in 1987
following which the company went public in 1993. Headquartered in Mumbai, CRISIL ventured
into infrastructure rating in 2016 and completed 30 years in 2017. CRISIL acquired 8.9% stake
in CARE credit rating agency in 2017. It launched India's first index to benchmark performance
of investments of foreign portfolio investors (FPI) in the fixed-income market, in the rupee as
well as dollar version in 2018. The company’s portfolio includes, mutual funds ranking, Unit
Linked Insurance Plans (ULIP) rankings, CRISIL coalition index and so on.

2. ICRA Limited

ICRA Limited is a public limited company that was set up in 1991 in Guru Gram. The company
was formerly known as Investment Information and Credit Rating Agency of India Limited.
Before going public in April 2007, ICRA was a joint venture between Moody’s and several
Indian financial and banking service organizations. The ICRA Group currently has four
subsidiaries - Consulting and Analytics, Data Services and KPO, ICRA Lanka and ICRA Nepal.
At present, Moody’s Investors Service, the international Credit Rating Agency, is ICRA’s largest
shareholder. ICRA’s product portfolio includes rating for - corporate debt, financial rating,
structured finance, infrastructure, insurance, mutual funds, project and public finance, SME, market
linked debentures and so on.

3. Credit Analysis and Research limited (CARE)

Launched in 1993, CARE offers credit rating services to areas such as corporate governance, debt
ratings, financial sector, bank loan ratings, issuer ratings, recovery ratings, and infrastructure ratings.
Headquartered in Mumbai, CARE offers two different categories of bank loan ratings, long-term and
short-term debt instruments. The company also offers ratings for Initial Public Offerings (IPOs), real
estate, renewable energy service companies (RESCO), financial assessment of shipyards, Energy
service companies (ESCO) grades various courses of educational institutions. CARE Ratings has also
ventured into valuation services and offers valuation of equity, debt instruments, and market linked
debentures. Moreover, the company has launched a new international credit rating agency ‘ARC
Ratings’ by teaming up with four partners from South Africa Brazil, Portugal, and Malaysia. ARC
Ratings has commenced operations and completed sovereign ratings of countries, including India.

4. Infomerics Valuation and Rating Private Limited

An RBI-accredited and SEBI-registered credit agency, Infomerics Valuation and Rating Private
Limited saw its inception by eminent finance professionals and is now run under the leadership
of Mr. Vipin Mallik. The credit bureau strives to offer an unbiased and detailed analysis and
evaluation of credit worthiness to NBFCs, banks, corporates and small and medium scale units.
It is through their rating and grading system that they determine the credit worthiness of an
organization. Infomerics helps in reducing any kind of information asymmetry amongst investors
and lenders. Keeping transparency as it is core value; the credit bureau makes sure to deliver
comprehensive and accurate reports and records of all their clients.

5. ONICRA CREDIT RATING AGENCY OF INDIA LIMITED

Onicra Credit Rating Agency OF India Limited is a Non-government company, incorporated on

27 Oct, 1993. It's a public unlisted company and is classified as company limited by shares.
Company's authorized capital stands at Rs 4500.0 lakhs and has 87.88889% paid-up capital
which is Rs 3955.0 lakhs. Onicra Credit Rating Agency OF India Limited last annual general
meet (AGM) happened on 30 Dec, 2017. The company last updated its financials on 31 Mar,
2017 as per Ministry of Corporate Affairs (MCA).

6. Fitch Ratings India Private Ltd

It is a part of the Fitch group of companies has been incorporated in 1913 in New York, U.S.A.
This is one of the top credit agencies in India. It provides financial information services in more
than 30 countries. It has more than 2000 employees working at 50+ offices all over the world.

7. Equifax

Equifax Inc. was incorporated in 1899. This agency has taken an important position among top
ten agencies in India and also throughout the world. It provides information to management
services. It also processes a lot of records of its 97 members to supply risk management
solutions, credit risk management and analysis, fraud detection triggers, decision technologies,
marketing tools, etc.

8. Brickwork Ratings India Private Ltd

Brickwork Ratings was established in 2007 as an individual credit rating firm by Sangeeta
Kulkarni. The company is registered with SEBI, RBI & NSIC. This firm provides its work
through a wide range of areas such as NCD, Bank Loan, Commercial Paper, and MSME. It is
one of the leading Indian credit rating companies which have already rated Rs. 200000 cores of
bonds and bank loans.

9. Credit Information Bureau India Limited (CIBIL):

CIBIL is a credit information company which maintains records of individual payments related
to credit cards and loans. The headquarter of CIBIL also is situated in Mumbai. CIBIL uses the
information of user's loan and credit card to generate credit information reports which may be
useful to approve the loan application.

Benefits of Credit Rating Agencies

Credit ratings are a considerable gadget for borrowers to get admission to loans and debt. When
investors have good credit history then their credit rating score will have no objection. Credit
Ratings help investors to effortlessly borrow money from financial institutions or public debt
markets. At customer level generally banks, base the terms of a loan as a main task of the credit
rating, so with this the better the credit score, the better the terms of the loan typically are. If the
credit score is poor, the bank may even reject the loan. As this is the base for granting of loans.
When loans are approved for investors then they start new business by which employment
increases, increasing incomes of individuals. Growth is possible when all the sectors develop.
When one sector is developed the result will play a part for the development of another sector

Benefits of Credit Rating Agencies to Investors

a. Safeguards against bankruptcy

Credit rating of an instrument done by credit rating agency gives an idea to the investors about
degree of financial strength of the issuer company which enables him to decide about the
investment. Highly rated instrument of a company gives an assurance to the investors of safety of
instrument and minimum risk of bankruptcy.

b. Easy understand ability of investment proposal:

Rating symbol can be understood by an investor which needs no analytical knowledge on his
part. Investor can take quick decisions about the investment to be made in any particular rated
security of a company.

c. Choice of Investment
Several alternative credit rating instruments are available at a particular point of time for making
investment in the capital market and the investors can make choice depending upon their own
risk profile and diversification plan.

d. Saving of resources
Investors rely upon credit rating. This relieves investors from the botheration of knowing about
the fundamentals of a company, its actual strength, financial standing, management details, etc.
The quality of credit rating done by professional experts of the credit rating agency reposes
confidence in him to rely upon the rating for taking investment decisions.
Benefits of Credit Rating to a Company

a. Lower cost of borrowing

A company with highly rated instrument has the opportunity to reduce the cost of borrowing
from the public by quoting lesser interest on fixed deposits or debentures or bonds as the
investors with low-risk preference would come forward to invest in safe securities though
yielding marginally lower rate of return.

b. Wider audience for borrowing

A company with a highly rated instrument can approach the investors extensively for the
resource mobilization using the press media. Investors in different strata of the society could be
attracted by higher rated instrument as the investors understands the degree of certainty about
timely payment of interest and principal on a debt instrument with better rating
.
c. Motivation for growth
Rating provides motivation to the company for growth as the promoters feel confident in their
own efforts and are encouraged to undertake expansion of their operations or new projects.

Dis-Advantages of credit ratings

 In the absence of quality rating, credit rating is a curse for the capital market
industry.

 Rating is done on the present and the past historic data of the company and this is only
a static study.
 Rating Company might conceal material information from the investigating team of
the credit rating company. In such cases quality of rating suffers and renders the rating
unreliable.
 Once a company has been rated and if it is not able to maintain its working results and
performance, credit rating agencies would review the grade and down grade the rating
resulting into impairing the image of the company
1.2 Objectives of study
 To find impact of Credit Rating on development of company.
 To examine whether the corporate investment inflow (borrowings) go high / low
remaining consequent upon a respective higher / lower ratings of the company.

1.3 Need of study

Credit Rating Agencies play a major role in company’s development. Credit rating agencies
primary role is to scale back information asymmetry in credit markets by providing customers an
opinion on the potential. Banks got to select best credit rating agency to urge accurate
information about customers. It also helps the distributers of the debt instruments to cost their
issues within the approved manner and to succeed in bent innovative investors. The most
importance of the study is to understand the roles played by credit rating agencies for a rustic to
develop altogether the sectors.

1.4 Scope of the study

The scope explains the theoretical aspects of credit rating in developing a company. The study
has been carried on the efficiency of credit rating agencies. The study considered the steps which
cause company’s development

1.5 Research Methodology

Both analytical research and descriptive research were used in analyzing the objective of the
study. Analytical research represents the investigative and arranged study using the facts which
are already available to return to a conclusion. Descriptive research represents expressive and
graphical representation of the data for analyzing and representing the result for the study.

1.6 Source of Data

The term is used in contrast with the term secondary data.
Secondary data: Data from websites, newspapers, journals, books, credit rating agencies is
employed for the study. Tools and Techniques: Tools and techniques used for the study are
tables, line graphs and pie charts.

1.7 Limitations of Study

 The cost that is involved in maintaining the qualified, experienced and trained credit
rating executives is very high.
 The prevailing manual credit risk management systems are quite expensive and very
difficult to maintain.
 The study is done only on one company

CHAPTER-2
REVIEW
OF
LITERATURE
Lal, Jawahar, and Mamta Mitra (2011)
Credit-rating agencies play a key role in financial markets by helping to reduce the informative
asymmetry between lenders and borrowers regarding the creditworthiness of the latter. While the
various bond-rating areas have been extensively evaluated for mature markets, similar evidence
for emerging markets, such as India, is limited. In particular, the issues relating to know the
efficiency of stock markets to assimilate bond-rating changes announcements made by rating
agencies from time to time have been ignored. The present article constitutes an attempt in this
direction to examine the effects of rating changes announcements on share prices in India. This
article has examined the announcement effects of bond-rating changes on equity share prices in
India during the six-year period, 1 April 2002 to 31 March 2008. Using a sample of ratings of
117 long-term debt instruments from 98 companies, the announcement effects have been
examined by using event-study methodology. The empirical evidence indicates that the improved
(deteriorated) financial and operating conditions of the companies were realized by the
investment community before the ratings were changed by the bond-rating agency

Kaur, Kuljeet, and Rajinder Kaur(2011)

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.
The corporations with specialized functions namely, assessment of the likelihood of the timely
payments by an issuer on a financial obligation is known as Credit Rating Agencies. The main
objective of the paper is to assess the consistency in rating methodology of each individual rating
agency by taking companies belonging to same rating class (within group) including AAA, AA,
A and BBB as sample. It has been assessed that all the rating agencies use consistent
methodology while assigning a particular rating grade as there is no significant difference in the
values of all the ratios which belong to different sets of similarly rated companies in maximum
cases.

Kumar, KS Venkateswara, and S. HANUMANTHA RAO (2012)

Credit rating business is a niche segment in the financial services arena. In the post-reforms era,
with increased activity in the Indian Financial sector both existing and new companies are opting
for finance from the capital market. The competition among firms for a slice of the savings cake
has increased. Credit rating business in India is a sweet spot as it is on the cusp of robust growth
potential, driven by three triggers: Strong capex cycle in Indian economy, lower penetration of
corporate bond market and regulatory push due to implementation of Basel II norms. Credit
rating helps in the development of financial markets. Credit rating is an investor service and a
rating agency is expected to maintain the highest possible level of analytical competence and
integrity. The analytical framework of rating deals with evaluation of both the business and
financial risks associated with that entity. Besides qualitative aspects like management
capabilities also play a considerable role in determining a rating. Credit ratings establish a link
between risk & return. They thus provide a yardstick against which to measure the risk inherent
in any instrument. Analytical framework of rating deals with evaluation of both the business &
financial risks associated with that entity. The Reserve Bank of India liaises with SEBI, on the
issue of rating agencies’ adherence to IOSCO Code of Conduct Fundamentals. Given the slump
faced by economies globally and the rise in the number of defaultees, it is about time that the
channel had a strong credit rating system in place to ensure smooth operation for the entire chain.
The most significant change in recent relates to emphasis on their accountability and more
important, the caution in regulators’ use of ratings.

Finnerty, John D., Cameron D. Miller, and Ren-Raw Chen.(2013)

We document the ability of the credit default swap (CDS) market to anticipate favorable as well
as unfavorable credit rating change (RC) announcements based on more extensive samples of
credit rating events and CDS spreads than previous studies. We obtain four new results. In
contrast to prior published studies, we find that corporate RC upgrades do have a significant
impact on CDS spreads even though they are still not as well anticipated as downgrades. Second,
CreditWatch (CW) and Outlook (OL) announcements, after controlling for prior credit rating
events, lead to significant CARs at the time positive CW and OL credit rating events are
announced. Third, we extend prior results by showing that changes in CDS spreads for non-
investment-grade credits contain information useful for estimating the probability of negative
credit rating events. Fourth, we find that the CDS spread impact of upgrades but not downgrades
is magnified during recessions and that upgrades and downgrades also differ as to the impact of
simultaneous CW/OL announcements, investment-grade/speculative-grade crossovers, current
credit rating, market volatility, and industry effects.

Lemmon, Michael, and Michael R. Roberts (2010)

We examine how shocks to the supply of credit impact corporate financing and investment using the
collapse of Drexel Burnham Lambert, Inc.; the passage of the Financial Institutions Reform,
Recovery, and Enforcement Act of 1989; and regulatory changes in the insurance industry as an
exogenous contraction in the supply of below-investment-grade credit after 1989. A difference-in-
differences empirical strategy reveals that substitution to bank debt and alternative sources of capital
(e.g., equity, cash balances, and trade credit) was limited, leading to an almost one-for-one decline in
net investment with the decline in net debt issuances. Despite this sharp change in behavior, corporate
leverage ratios remained relatively stable, a result of the contemporaneous decline in debt issuances
and investment. Overall, our findings highlight how even large firms with access to public credit
markets are susceptible to fluctuations in the supply of capital.

Chen, Sheng-Syan, et al(2013)

Sovereign credit rating changes have an influence on real private investment of re-rated
countries. We find significant increases in private investment growth following upgrades in
sovereign ratings. These increases, however, are transitory. We also find significant, temporary
declines in private investment growth following sovereign rating downgrades. The results hold
after accounting for re-rated countries’ growth opportunities, endogeneity, and other factors that
could affect private investment. The irreversible nature of investment may be the explanation for
the temporary changes in the growth rates of physical capital investment associated with
revisions in sovereign credit ratings.
Hull, John, Mirela Predescu, and Alan White. (2004)
A company’s credit default swap spread is the cost per annum for protection against a default by
the company. In this paper we analyze data on credit default swap spreads collected by a credit
derivatives broker. We first examine the relationship between credit default spreads and bond
yields and reach conclusions on the benchmark risk-free rate used by participants in the credit
derivatives market. We then carry out a series of tests to explore the extent to which credit rating
announcements by Moody’s are anticipated by participants in the credit default swap market.

Jewell, Jeff, and Miles B. Livingston.(2000)

This article updates a study that looks at the impact of a third rating from Fitch IBCA on bond
prices; it examines the impact on prices of a rating from Duff & Phelps Credit Rating Co. The
empirical evidence indicates that a third credit rating from either DCR or Fitch has value to the
bond market. When there is a third rating, upgrades by Moody's and Standard & Poor's are more
likely and downgrades less likely. Third ratings also have an incremental impact upon bond
yields.

Kadapakkam, Palani-Rajan, P. C. Kumar, and Leigh A. Riddick. (1998)

This paper examines the degree to which cash flow availability influences firm investment in six
OECD countries. In particular, we are interested in the extent to which the reliance on internal
funds is affected by firm size, since there is general agreement that smaller firms have less access
to external capital markets and, thus, should be more affected by the availability of internal
funds. Earlier work has concluded that the documented positive relationship between cash flow
and investment is evidence of the existence of financial constraints. We first examine all firms,
regardless of size, in each country, and we find that the amount of corporate investment is
affected by internal resources in all six countries; that is, internal financing affects firm
investment. We then repeat the analysis segmenting the sample using three measures of firm
size. Contrary to our a priori expectations, we find that the cash flow-investment sensitivity is
generally highest in the large firm size group and smallest in the small firm size group. We
deduce that the explanations for these findings are grounded in managerial agency
considerations, and in the greater flexibility enjoyed by large firms in timing their investments.
Thus, we conclude that the degree of sensitivity of a firm's investments to its cash flows cannot
be interpreted as an accurate measure of its access to capital markets, since small firms are
known to have less access to external markets.

Jain, Tarun, and Raghav Sharma. (2008)

Credit Rating Agencies (CRAs) influence investor behaviour and regulate issuers' access to
financial markets and thus, they act as markets' gatekeepers. Further, given the statutory
requirements for rating of securities before trading can commence thereon, CRAs occupy an
intriguing inter-twined position of quasi-public regulators charged with the implementation of
good governance norms and informational intermediaries seeking to protect the investors by
purging the markets of information asymmetry. However, the conflict of interest issues add
complexity to this scenario and the role of CRAs, after their complicity in the sub-prime
mortgage crisis, is being debated internationally.

In this paper we examine the role and positioning of the CRAs in the capital markets of India,
with a critical eye to SEBI (Credit Rating Agencies) Regulations, 1999, the regulatory
framework governing the CRAs. We ferret out the shortfalls that the existing framework carries
and taking cues from the US Nationally Recognized Statistical Rating Organizations (NRSROs)
model and also the standards proposed by International Organization for Securities Commissions
(IOSCO), present a case for reform of the existing framework for CRA regulation in India.
Kisgen, Darren J (2006)
This paper examines to what extent credit ratings directly affect capital structure decisions. The
paper outlines discrete costs (benefits) associated with firm credit rating level differences and
tests whether concerns for these costs (benefits) directly affect debt and equity financing
decisions. Firms near a credit rating upgrade or downgrade issue less debt relative to equity than
firms not near a change in rating. This behavior is consistent with discrete costs (benefits) of
rating changes but is not explained by traditional capital structure theories. The results persist
within previous empirical tests of the pecking order and tradeoff capital structure theories.

Hovakimian, Armen, Ayla Kayhan, and Sheridan Titman (2009)

Credit ratings can be viewed as a summary statistic that captures various elements of a firm’s
capital structure. They incorporate a firm’s debt ratio, the maturity and priority structure of its
debt, as well as the volatility of its cash flows. However, regressions of credit ratings on firm
characteristics provide inferences that are not always consistent with the interpretations of extant
regressions that include various debt ratios as independent variables. In particular, we find that
coefficients of variables that have been viewed as proxies for the uniqueness and the extent that
assets can be redeployed, e.g., R&D expenses and asset tangibility, have different effects in the
credit rating regressions than in the debt ratio regressions. In addition, we find that after
controlling for whether or not firms have debt ratings, the extant evidence of a positive relation
between debt ratios and size is reversed. Finally, using regression-based proxies for target ratings
and debt ratios, we find that deviations from rating targets as well as debt ratio targets influence
subsequent corporate finance choices. When observed ratings are below (above) the target, firms
tend to make security issuance and repurchase decisions that reduce (increase) leverage. In
addition, firms are more likely to decrease (increase) dividend payouts when they have below
(above) target ratings and make more (fewer) acquisitions when they have above (below) target
ratings.
 Bibliography
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Indian companies." Vision 15.3 (2011): 231-238.

2. Kaur, Kuljeet, and Rajinder Kaur. "Credit Rating in India: A Study of Rating Methodology
of Rating Agencies." Global Journal of Management and Business Research 11.12 (2011).

3. Kumar, KS Venkateswara, and S. HANUMANTHA RAO. "Credit Rating-Role In Modern

Financial System." International Journal of Marketing, Financial Services & Management
Research 1.8 (2012): 126-138.

4. Finnerty, John D., Cameron D. Miller, and Ren-Raw Chen. "The impact of credit rating
announcements on credit default swap spreads." Journal of Banking & Finance 37.6 (2013):
2011-2030.

5. Lemmon, Michael, and Michael R. Roberts. "The response of corporate financing and
investment to changes in the supply of credit." Journal of Financial and quantitative
analysis (2010): 555-587.

6. Chen, Sheng-Syan, et al. "How do sovereign credit rating changes affect private
investment?." Journal of Banking & Finance 37.12 (2013): 4820-4833.

7. Hull, John, Mirela Predescu, and Alan White. "The relationship between credit default swap
spreads, bond yields, and credit rating announcements." Journal of Banking & Finance 28.11
(2004): 2789-2811.

8. Jewell, Jeff, and Miles B. Livingston. "The impact of a third credit rating on the pricing of
bonds." The journal of fixed income 10.3 (2000): 69-85.

9. Kadapakkam, Palani-Rajan, P. C. Kumar, and Leigh A. Riddick. "The impact of cash flows
and firm size on investment: The international evidence." Journal of banking & Finance 22.3
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10. Jain, Tarun, and Raghav Sharma. "Credit rating agencies in India: A case of authority
without responsibility." Company Law Journal 3 (2008): 89-109.

11. Kisgen, Darren J. "Credit ratings and capital structure." The Journal of Finance 61.3 (2006):
1035-1072.
12. Hovakimian, Armen, Ayla Kayhan, and Sheridan Titman. "Credit rating
targets." Available at SSRN 1098351 (2009).

CHAPTER-3
COMPANY PROFILE
Introduction