LOVELY PROFESSIONAL UNIVERSITY DEPARTMENT OF MANAGEMENT

Report on Summer Training "AWARENESS AND IMPLEMENTATION OF CRlSIL

SME RATINGS AMONG EMERGING SME'S"
Submitted to Lovely Professional University
In partial fulfillment of the Requirements for the award of Degree of Master of
Business Administration
Submitted by: Roopendra Singh Chandel RS1904A57 DEPARTMENT OF MANAGEMENT LOVELY
PROFESSIONAL UNIVERSITY PHAGWARA
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ACKNOWLEDGEMENTS I would like to express my sincere thanks to CRISIL Ltd., Ludhi

ana for giving me the opportunity to carry out the Summer Internship Program in
their organization. The whole period spent with the organization has been of imm
ense learning experience about the SME Ratings. Preparing a project of such a ki
nd is not an easy task in itself and I am sincerely thankful to all those people
who help me lot, in preparing and completing this project. I am grateful to CRI
SIL Ltd. who has given me this opportunity to carry out the project “AWARENESS AND
IMPLEMENTATION OF CRlSIL SME RATINGS AMONG EMERGING SME'S”A study on investor’s per
ception their behavior about equities. I sincerely thank to Mrs. Sarita Gupta (T
rainning Co-ordinator,CRISIL Ltd., Ludhiana) for providing me this valuable lear
ning opportunity. I would also like to thank Mr. Ashwani Panesar – Faculty Guide,
Lovely Professional University, Phagwara for her valuable guidance and insight a
midst his busy schedule. Finally I would like to thank Mr. Jatin Gupta (Relation
ship Manager) my project supervisor without his help and guidance the completion
of this project would have become difficult task.
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CHAPTER – 1 INTRODUCTION I.1 Introduction of the company. I.2 Business and service
s of the company.

I.3 Profile of the company.

I.4 History of the company.

I.5 Organization and Infrastructure.
I.6 Milestones of the company. 1.7 Product range of the company. 1.8 Performance
of the company. 1.9 Benefits of SME Rating
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1.1
Introduction to CRISIL
An increased range of borrowers, increasingly complex financial transactions and
large quantum of debt borrowed in India warranted the need of provider of objec
tive, accurate and timely information of credit quality. To fulfill this objecti
ve, CRISIL was incorporated in 1987 as public limited company. Today CRISIL is I
ndia’s largest and most respected rating agency. CRISIL’s majority share holder is s
tandard $ Poor’s the world’s foremost provider of independent credit rating, indices
, risk evaluation, investment research and data. Leading corporation worldwide a
re rated by S&P. S&P’s credit risk tracer (CRT) has analyzed about 10 lakh SMEs in
Europe
Established in 1987, CRISIL has been promoted by leading Indian financial instit
utions like The Industrial Credit and Investment Corporation of India Limited (I
CICI), Unit Trust of India (UTI) and Housing Development Finance Corporation Lim
ited. The major shareholders include Standard & Poor s, ICICI, UTI, Life Insuran
ce Corporation, General Insurance Corporation and a host of nationalized and for
eign banks. CRISIL became a public limited company in November 1993 and is prese
ntly a quoted company on the Bombay Stock Exchange and the National Stock Exchan
ge . Crisil pioneered the concept of credit rating in India and developed the fr
amework and methodology for rating debt in the context of the India financial, m
onetary and regulatory system. CRISIL today has attained a pre-eminent position
in the rating industry. It is the largest rating agency in the South East Asia r
egion and is amongst the four largest ratings agencies in the world. In February
1996, CRISIL entered into a strategic alliance with Standard and
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Poor’s .The relationship got strengthened with S&P with CRISIL’s working credibility
, competence and management. The relationship got further strengthened with S&P
taking up a majority stake in CRISIL. CRISIL started with the rating of corporat
e dept and other the years extended its scope of activities. Its range of servic
es one includes rating services, advisory services and investment research relat
ed services.
1.2 CRISIL Business and Services
CRISIL Limited is India’s leading Ratings, Financial News, Risk & Policy Advisory
Company. CRISIL helps clients manage and mitigate business and financial risk, e
nables markets to function better through benchmarks and best practices and prov
ides workable inputs in shaping public policy. CRISIL’s services and products span
the entire value chain starting from data collection and management to providin
g opinions and integrated solutions. These products and services are backed by h
ighest standards of integrity, independence and analytical rigor, making CRISIL
the most credible provider of these services in the market. CRISIL’s clients depen
d upon it to constantly deliver objective opinions and the most workable solutio
ns. Through a sustained theme of innovation and thought leadership, CRISIL has l
ed the markets with new thoughts, new analytical frameworks and new approaches,
placing it in its leading position in the Indian market place. to all participan
ts in the financial markets. CRISIL Infrastructure Advisory Group provides worka
ble policy and transaction level solution to Central and State governments, publ
ic sector and private sector entities, that help them make the difference. CRISI
L Investment and Risk Management Group (part of CRISIL’s advisory services) and Gl
obal Data Services India Ltd (GDSIL), both CRISIL subsidiaries. CRISIL Ltd provi
des business knowledge through research on industries, companies and the economy
, GDSIL provides analytical data base to support CRISIL as well as external clie
nts in there research and analysis. CRISIL’s news services (CRISIL Market wire – CMW
) are India’s leading provider of real time news and analysis on India debt market
s.
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1.2.a CRISIL’SME RATING SERVICES

CRISIL commenced its SME (small & medium enterprises) rating services in April 2
005. CRISIL has two products for rating small scale industries SSIs and SMEs viz
. NSIC-CRISIL performance and credit rating for SSI and SME rating respectively
CRISIL rates SSI and SMEs on two separate rating scales as given below:
A. NSIC-CRISIL performance and credit rating for SSIs
CRISIL signed an MOU with NATIONAL SMALL INDUSTRIES CORPORATION (NSIC) to rate S
SIs in India at a subsidized cost.
An NSIC – CRISIL RATING reflects CRISIL’s opinion on company’s performance capability
and financial strength. Rating is assigned on following rating scale.
NSIC rating scale
TABLE NO .1 Financial Strength High Moderate SE 1A SE 1B SE 2A SE 2B SE 3A SE 3B
SE 4A SE 4B SE 5A SE 5B Low SE 1C SE 2C SE 3C SE 4C SE 5C
Performance Capability
Highest High Moderate Weak Poor
For example, a company with high Performance Capability and high Financial Stren
gth will be
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rated SE2A , while one with weak Performance Capability and low Financial Stren
gth will be rated SE4C .
B. SME RATING
CRISIL SME Ratings will reflect the level of creditworthiness of an SME, adjudge
d in relation to other SMEs. CRISIL SME Ratings will be assigned with the follow
ing rating definition:
"The rating indicates that the level of creditworthiness of an SME, adjudged in
relation to other SMEs is ………" (as per table below)
TABLE NO .2 CRISIL SME Rating SME 1 Definition Highest
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SME 2 SME 3 SME 4 SME 5 SME 6 SME 7 SME 8

High Above Average Average Below Average Inadequate Poor Default
1.2b CRISIL Rating Symbols For Long Term Ratings
AAA (Triple Safety Instruments rated AAA are judged to offer the highest degre
e of safety Highest with regard to timely payment of financial obligations. Any
adverse changes in circumstances are most unlikely to affect the payments on the
instrument AA Instruments rated AA are judged to offer a high degree of safet
y with (Double A) High regard to timely payment of financial obligations. They d
iffer only Safety marginally in safety from `AAA issues. A Instruments rated A
are judged to offer an adequate degree of safety Adequate Safety with regard t
o timely payment of financial obligations. However, changes in circumstances can
adversely affect such issues more than those in the higher rating categories. B
BB Instruments rated BBB are judged to offer moderate safety with regard (Trip
le B) Moderate to timely payment of financial obligations for the present; howev
er, Safety changing circumstances are more likely to lead to a weakened capacity
to pay interest and repay principal than for instruments in higher rating categ
ories. BB Instruments rated BB are judged to carry inadequate safety with rega
rd (Double B) to timely payment of financial obligations; they are less likely t
o default Inadequate Safety in the immediate future than instruments in lower ra
ting categories, but A)
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B High Risk
C Substantial Risk D Default NM Not Meaningful
an adverse change in circumstances could lead to inadequate capacity to make pay
ment on financial obligations. Instruments rated B are judged to have high lik
elihood of default; while currently financial obligations are met, adverse busin
ess or economic conditions would lead to lack of ability or willingness to pay i
nterest or principal. Instruments rated C are judged to have factors present t
hat make them vulnerable to default; timely payment of financial obligations is
possible only if favourable circumstances continue. Instruments rated D are in
default or are expected to default on scheduled payment dates. Instruments rate
d NM have factors present in them, which render the outstanding rating meaning
less. These include reorganisation or liquidation of the issuer, the obligation
being under dispute in a court of law or before a statutory authority etc.
ABOUT- NSIC
National Small Industries Corporation Ltd. (NSIC), an ISO 9001 certified company
, since its establishment in 1955, has been working to fulfill its mission of pr
omoting, aiding and fostering the growth of small scale industries and industry
related small scale services/business enterprises in the country. Over a period
of five decades of transition, growth and development, NSIC has proved its stren
gth within the country and abroad by promoting modernization, up gradation of te
chnology, quality consciousness, strengthening linkages with large medium enterp
rises and enhancing exports - projects and products from small industries.
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NSIC operates through 9 Zonal Offices, 33 Branch Offices, 14 Sub Offices, 10 NSI
C Business Development Extension Offices, 5 Technical services Centers, 3 Extens
ion Centers and 2 Software Technology Parks supported by a team of over 500 prof
essionals spread across the country. To manage operations in African countries,
NSIC operates from its office in Johannesburg. NSIC carries forward its mission
to assist small enterprises with a set of specially tailored schemes designed to
put them in a competitive and advantageous position. The schemes comprise of fa
cilitating marketing support, credit support, technology support and other suppo
rt services.
NSIC carries forward its mission to assist small enterprises with a set of speci
ally tailored schemes designed to put them in a competitive and advantageous pos
ition. The schemes comprise of facilitating marketing support, credit support, t
echnology support and other support services.
RATING FEES NSIC-CRSIL PERFORMANCE AND CREDIT RATING FOR SSI’s Turnover (Rs . Lakh
)Turnover < 50 50-200 Rating fees (Rs.) Service tax 10.30% (Rs.) 40,000 @ 4,120
45,000 4,635 (Rs. Lakh)Turnover (Rs. Lakh) > 200 60,000 6,180
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Total fees (Rs.)

44,120
49,635 30,000
66,180 40,000
Subsidy from NSIC 25,000 (Rs.) Amount payable by 19,120 SSIs (Rs.) *Concessional
Fees 7,456
19,635 9,927
26,180 13,236
*concessional fees are applicable for CRISIL’s partner MOU bank customers and indu
stry association members. The fees mentioned above are inclusive of all expenses
CRISIL will occur in connection with the exercise.
RATING FEES FOR CRISIL SME RATING Companies under Operations Turnover (Rs .Turno
ver Turnover Tunover (Rs.Turnover Crore) (Rs. Crore)(Rs. Crore)Crore) (Rs. Crore
) < 10 10-25 25-50 50-75 >75 Rating (Rs.) Service tax fees 60,000 65,000 70,000
6,180 6,695 7,210 8,755 Total fees (Rs.) 66,180 71,695 77,210 93,755 121,330
12
85,000
110,000
11,330
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CRISIL
•
CRISIL has set up a dedicated team of specialists in SME rating, and designed se
parate rating scale for rating SMEs and SSIs (entities with valid SSI certificat
es). CRISIL’s SME Rating has a team of 25 professionals and a company wide network
to provide the rating services to SMEs and SSIs in any part of the country.
•
In association with NSIC, CRISIL is now rating small scale industries (SSI) on s
pecial rating scale. NSIC provides subsidy for rating of SSIs. CRISIL has alread
y rated 350 SMEs SSIs on the “NSIC-CRISIL” and the “SME rating” scale. More than 100 add
itional mandates are under the process of execution. CRISIL has conducted studie
s on 19 SME clusters across 8 industries. CRISIL’s SME risk assessment model insta
lled in 8 reputed
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public and private sector banks. CRISIL provided its expertise in the SME sector
for emerging India award 2006, organized by ICICI Banks and CNBC. Of 35000 entr
ies received for the awards, best SMEs were identified across 10 categories.
Besides marketing the rating services directly to the SMEs through one-to-one co
ntact, other alternative approaches were adopted to develop the business. To add
ress the large number of SMEs (including SSIs) in India, CRISIL adopted an ‘aggreg
ator’ approach wherein SMEs could be accessed in groups through an aggregator like
a bank, an industry association, or a large corporate with several SME dealers
or vendors
Since bank in India have large SME portfolios as part of their priority sector b
usiness, and SMEs depends substantially on banks for their fund requirements, CR
ISIL decided to enter into national level tie-ups with banks to provide rating s
ervices to their SME borrowers
CRISIL SME Ratings Partner Banks CRISIL has partnered with 26 banks and two fina
ncial organisations to extend the special concessional rating fees to its custom
ers. The following partner banks and financial organisations are giving interest
rate benefits to the customers rated by CRISIL. 1. 2. 3. 4. 5. National Small I
ndustries Corporation Bank of India Canara Bank Central Bank of India Corporatio
n Bank
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6. Punjab National Bank 7. Syndicate Bank 8. UCO Bank 9. Union Bank of India 10.
United Bank of India 11. Vijaya Bank 12. Kerala Financial Corporation In additi
on to the above banks, CRISIL has partnered with the following 16 banks to give
special concessional fees to rate their customers. 1. Allahabad Bank 2. Andhra B
ank 3. Bank of Baroda 4. Bank of Maharashtra 5. Dena Bank 6. The Federal Bank Li
mited 7. HDFC Bank Limited 8. Indian Bank 9. Indian Overseas Bank 10. State Bank
of Bikaner & Jaipur 11. State Bank of Hyderabad 12. State Bank of India 13. Sta
te Bank of Indore 14. State Bank of Mysore 15. State Bank of Saurashtra 16. Stat
e Bank of Travancore
It is in discussion with other banks to enter into similar tie-ups. CRISIL ratin
g provide banks a ready reliable third party credit opinion and facilitate lendi
ng decision by helping fix appropriate quantum of loans, rate of interest, margi
n and security. As per these MOUs, CRISIL charges fees at concessional rates (as
low as Rs. 7456 for small companies) to the banks, customers and the bank in tu
rn offer favorable terms to entities with high CRISIL Ratings. UCO bank, United
and Union bank have already announced reduced interest rates for highly rated en
tities.
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Though SMEs in India are dispersed across the country. There are certain pockets
with concentrations of SMEs. These are called SMEs clusters. The SMEs in cluste
r or otherwise have organized themselves into industry associations which work a
s a platform for the welfare of members. CRISIL has reached an understanding wit
h several industry associations across the country to provide rating service to
their members at attractive terms.
Similarly, large companies in India deals with several SMEs in their supply chai
n as dealers for selling finished goods, and the vendors for procuring raw mater
ial or sub-assemblies. CRISIL has signed agreements with such companies for grad
ing their deals or rating their vendors.
CRISIL, with its reliability, width, and depth of experience in rating services,
made a world of difference to the corporate sector when it is pioneered the con
cept of rating in India. CRISIL believes it will make the same difference to the
SME sector with its SME sector rating.
1.2.c An overview of the SME\SSI sector in India
In the India market, the common concept was that of small scale industry (SSI);
the definition of a medium enterprises is of more recent origin. The government
of India has historically tracked the profile and growth of the SME sector in te
rms of SSIs. SSIs are a vibrant and important sector of the Indian economy. They
make significant contribution to the annual GDP,
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exports and employment. In an environment of sustained high economic growth, eco

nomic reforms and economic liberalization, the role and the importance of the SS
I sector will be even more significant in the future.
The small scale sector has grown rapidly over the years. The growth rate during
the various plan periods has been very impressive. The number of small scale uni
ts has increased many folds over the years. Currently there are about 118 SSIs i
n India. The sector accounts for around 95 percent of the industrial units in th
e country, contributing 40% of the manufacturing sector output and approximately
35% of the nation exports. The total value of production by SSI units for the y
ear 2004-2005 was approximately Rs. 418300 crore. In addition to the contributio
n of 40% towards direct export, the SSI contributes around 15% to export in dire
ctly.
It has been estimated that an investment of Rs. 10 lakh in fixed assets in the s
mall scale sector reduces Rs. 46.2 lakh worth of goods or services. SSI sector i
n India creates the largest employment opportunities for the Indian populace, ne
xt only to agriculture. It has been estimated that investment of Rs. 1 lakh in f
ixed assets in the small scale sector generates employment for four persons. Ove
rall, the sector currently employs around 2.83 crore people.
Small Scale Industries
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As defined by the ministry of SSI, government of India, the policy making and pr
omoting body for SSIs in India, an SSI is defined as:
“An industrial undertaking in which the investment is fixed assets in plant and ma
chinery, whether held on ownership terms, on lease, or on high purchase, does no
t exceed Rs. 1 crore, subject to the condition that the unit is not owned or con
trolled by, or a subsidiary of, any other industrial undertaking”.
SSI units mostly belong to the manufacturing sector. However some service enterp
rises such as software development enterprises, cold storage units etc. Have als
o been included under the SSI umbrella. Previously the ministry of SSI also defi
ned small scale services and business enterprises (SSSBEs) as enterprises having
investment equipment excluding investment in land and building up to Rs.10 lakh
. SSSBEs include enterprises working in close association with manufacturing ent
erprises like CAD\CAM blueprinting, and industrial consulting etc.
Small enterprises both manufacturing and service sector are eligible for receivi
ng subsidy in the rating fees norms national small industries corporation limite
d (NSIC)
As per the new SMED (small and medium enterprises development) act the limited f
or investment in plant and machinery in small enterprises has been increased to
rs. 5 crore. the new act is expected to become operational with effect from oct,
2,2006.
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Consideration the growing importance of the service sector in the country’s econom
y, the SMED Act defined the small enterprises in the service sector as one havin
g investment in equipment(excluding investment in land and building) up to RS. 2
crore
Small and Medium Enterprises
The SMED Act defines a Medium Enterprises as one with investment in the plant ma
chinery in excess of the SSI limit and up to Rs.10 crore. Before this there was
no commonly accepted definition of medium enterprises.
The SMED Act defines a medium enterprises in the service sector as one having in
vestment in equipment (in excluding investment in land and building) up to Rs.5
crore. Medium enterprises, which are relatively bigger in size, have different c
redit needs. Looking at this, CRISIL has developed a separate scale for rating t
hese enterprises (an 8 point scale as given in the brochure for SME rating). For
rating the medium enterprises, CRISIL goes by the definition of such enterprise
s by the banks.
Tabular representation of ceiling in investment for enterprises in manufacturing
and service sector as per the new SMED Act:
TABLE NO .3
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Manufacturing enterprises Investment in Plant and Machinery Micro Small Medium U

p to Rs.25 lakh Above Rs. Lakh up to Rs.5 crore Above Rs.5 crore up to Rs.10 cro
re
Services Enterprises Investment in Equipment Up to Rs.10 lakh Above Rs.10 lakh R
s.2crore Above Rs.2 crore Rs.5crore up up to to
1.3 PROFILE OF THE COMPANY CRISIL is India s leading Ratings, Research, Risk and
Policy Advisory Company. CRISIL offers domestic and international customers a u
nique combination of local insights and global perspectives, delivering independ
ent information, opinions and solutions that help them make better informed busi
ness and investment decisions, improve the efficient Locations. CRISIL Headquart
ers Address
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Crisil India
House
(Pinnacle
Chambers)
121/122
Andheri
Kurla
Road
Andheri
(East)
Mumbai,Maharashtra,400093 Phone:-912256913001 Fax: 91 22 56913000 Headquarters I
ndustry Type Bombay Area, India Financial Services Public Company
Status
Operating
Company Size
2,000 employees
Revenue
2,873 mil [INR] (65%)
Founded Website
1987 www.crisil.com
Parent company Standard & Poor’s
subsidiaries
Irevna
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1.4. HISTORY OF THE COMPANY

Year 1987 1987-88 1990-91 1991-92
Milestone › CRISIL is incorporated › Pradip Shah is Managing Director Commences the
rating of Companies Establishes the Information Services Group
Provides technical assistance and training to Rating Agency Malaysia Berhard and
MAALOT, the Israeli Securities Rating Company Ltd. Makes public offering of 20,
00,000 equity shares of Rs. 10 each at a premium of Rs. 40 per share. The offer
is oversubscribed by 2.47 times
1993-94
1994-95 1995-96 1996-97 1997-98
› Mr. R Ravimohan takes over as Managing Director › Sets up the Advisory Services Gr
oup Forges a strategic alliance with Standard & Poor s Ratings Group. Standard &
Poors acquires 9.68% shareholding in CRISIL Sets up IISL, a Joint Venture betw
een CRISIL and National Stock Exchange for undertaking index business and relate
d activities. The new Company enters into a Consultancy and License Agreement
with Standard & Poors
1998-99
› Develops a framework for rating debt obligations supported by credit enhancement
s based on overseas guarantees called Foreign Structured Obligations › Launches th
e Risk Assessment Model (RAM) › Develops a web presence, launches the official web
site › Acquires the business of Information Products and Research Services (India)
Pvt. Ltd. along with its brand INFAC › Secures the Certificate of Registration un
der SEBI (Credit
Rating Agencies) Regulations, 1999
19992000
20012002
› Launches CRISIL Market Wire, a real-time financial news service › Launches Mutual
Fund Composite Performance Rankings
(CRISIL CPRs), Fund Risk Analytics Model and CRISIL Mutual Funds Portfolio Track
er
20032004
› Change of name of the company from "The Credit Rating Information Services of In
dia Limited" to "CRISIL Limited"
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› Rates the first CDO transaction of working capital facilities in the Asia Pacifi
c › Makes an equity investment in the Caribbean Information & Credit Rating Servic
es Limited (CariCRIS), (click here for more details) the first regional rating a
gency in the world, covering 19 countries. › Acquires Gas Strategies Group Limited
(earlier known as EconoMatters Limited), a London-based company engaged in gas
consulting, information and training/conferences › AMFI mandates CRISIL to provide
daily fund indices as
benchmarking standards for the mutual fund industry
20042005
› S&P acquires 3,120,948 equity shares of CRISIL from CRISIL shareholders through
an Open Offer taking S&P holding in CRISIL to 58.46% › CRISIL Board approves propo
sal to acquire Irevna group of
companies
2006 › CRISIL transfers assets and staff of CRISIL Market Wire to TV18 › CRISIL cons
titutes a new team to achieve greater integration with Standard & Poor s (S&P) i
n brand franchise, market development and sales efforts. › Irevna ranked the top i
nvestment research outsourcing firm by buyside firms according to a recent surve
y by the Brown-Wilson Group; sets up second delivery centre in Buenos Aires › Inte
r-company agreements signed between CRISIL and
Standard & Poor s - CRISIL now known as a Standard & Poor s Company
2007
› CRISIL transfers its advisory business (CRISIL Infrastructure Advisory and CRISI
L Investment & Risk Management Services) into a 100% subsidiary CRISIL Risk and
Infrastructure Solutions Limited. › CRISIL s subsidiaries CRISIL Research & Inform
ation Services Limited (CRIS), Global Data Services of India Limited, CRISIL Pro
perties Limited and Irevna Research Services Limited merged into CRISIL Limited
(CRISIL). › Ms. Roopa Kudva takes over as Managing Director & CEO of
CRISIL following Mr. R. Ravimohan s appointment as Managing Director & Region He
ad of Standard & Poor s South Asia
2008
› CRISIL announces sale of shareholding in Gas Strategies Group Ltd. › CRISIL launch
es its formal sustainable development programmed for Corporate Social Responsibi
lity
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› Launches the CRISIL Complexity Levels Service - an initiative aimed at strengthe
ning Indian capital markets through greater transparent for investors
1.5 MILESTONES OF THE COMPANY CRISIL is 23. At this important milestone, we refl
ect on our journey thus far and look into the horizon beyond. We began our journ
ey as India s first rating agency. Today, we are a diversified global analytical
platform with leadership positions in the ratings, research and advisory domain
s. Along the way, our growth has been closely intertwined with India s developme
nt milestones. We started in 1987 as a credit rating agency , at a time when len
ding rates in India were fixed, and there was, therefore, little demand for cred
it ratings. We firmly established ourselves as the country s leading rating agen
cy, respected for our fiercely independent, highly credible, and analytically ri
gorous views. Shouldering the mantle of a pioneer and a market leader, we facili
tated the development of India s credit market and built investor confidence in
our risk assessment capabilities. India s transformation into a market-led econo
my greatly increased its need for capital, and required extensive reforms and in
stitution building. Accordingly, we diversified into the infrastructure advisory
and business research domains, and quickly built up a reputation for independen
t, reliable and incisive information, research, models and advisory services. To
day, our services are key inputs in informed decision-making and the shaping of
public policy in India. With increasing globalization, we also focused on making
our income streams more global. We acquired Irevna, a pioneer in the investment
research outsourcing space; Irevna has since been voted No.1 in high-end invest
ment research and analytics outsourcing by the US-based Brown and Wilson Group t
wo years in a row in 2006 and 2007. We have a thriving business that meets incre
asing global demand for better understanding of the Indian business environment,
through the services offered by our research and advisory groups.
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Guided by our core values of integrity, independence, innovation, analytical rig

or and commitment, we are proud to have built a globally-acknowledged institutio
n of repute over these 20 years. We have facilitated the setting up of credit ra
ting agencies in several countries around the world. Our association and integra
tion with Standard & Poor s has further enhanced our capabilities and opened up
newer vistas of opportunity, for our businesses and people. The macro environmen
t trends, both in India and globally, present myriad business opportunities. At
a youthful 20, we are ideally positioned to service the needs of our expanding c
lient base by maintaining our focus on our mission: » Making markets function bett
er. » Helping clients manage and mitigate business and financial risks. » Shaping pu
blic policy. 1.6 PRODUCT OF THE COMPANY Ratings CRISIL Ratings CRISIL Ratings is
the only ratings agency in India to operate on the basis of sectoral specializa
tion. It reflects our sharpness of analysis, the responsiveness of the process a
nd the large-scale dissemination of opinion. CRISIL Ratings plays a leading role
in the development of the debt markets in India. The Rating Criteria & Product
Development Centre, responsible for policy research, new product development and
ratings quality assurance, has developed new ratings methodologies for debt in
struments and innovative structures across sectors. CRISIL Ratings provides tech
nical know-how to clients worldwide. We have helped set up ratings agencies in M
alaysia (RAM), Israel (MAALOT) and in the Caribbean.
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1.7 CRISIL s Performance at a glance

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(Rs. Lacs) Particulars Total Income for the year was Profit before depreciation
and taxes was Deducting there from depreciation of Profit before tax was Deducti
ng there from taxes of Profit after tax was The proposed appropriations are: Div
idend Corporate Dividend Tax General Reserve Balance carried forward
Year ended Dec. 31, 2009 40,389.03 18,696.71 1,184.38 17,512.33 3,774.52 13,737.
81
Year ended Dec. 31, 2008 27,088.00 10,481.23 1,333.87 9,147.36 2,080.28 7,067.08
5,057.50 859.52 1,373.78 17,663.64
1,806.25 337.07 706.71 8,775.36
How CRISIL SME/SSI ratings can be useful Banks • • • Creates a strong platform for wel
l rated SMEs to obtain CRISIL ratings under Basel II over a period of time An in
dependent assessment of the SME portfolio will help in improving asset quality C
lient retention : Bank will be able to retain its good customers by providing in
terest rate concessions to highly rated entities
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• •
Ratings could be used for all green-field projects where CRISIL’s appraisal skills
will be useful in evaluating the unique project risks Mapping of the banks inte
rnal rating scale with CRISIL rating will reduce the appraisal process significa
ntly for the branch managers and enable them to undertake quick and accurate dec
isions
BENEFITS OF CRISIL SME RATING 1. FASTER AND EASIER AVAILABILITY OF LOANS -: Bank
s appreciate the independence and analysis involved in CRISIL’s rating exercise. M
ore than 31 banks have entered into a formal agreement with CRISIL SME ratings,
under which, they extend favorable terms and conditions, to CRISIL rated units,
including lower rate of interest. 2. INCREASED CREDIBILITY BUSINESS ASSOCIATES -
: WITH BANKERS, CUSTOMERS AND
An SME rating from CRISIL, increases the credibility of the rated unit, in domes
tic and international markets, by providing the bank, customers, and business, a
ssociates with credible information about the company. This increases their conf
idence in the unit and helps in increasing business and building better relation
ships.
3. DETAILED RATING REPORT -:
Each CRISIL rated SME receives a rating report which provides comprehensive deta
ils about the rated unit, its functioning, as well as the organization’s strengths
and weaknesses. This rating report can be used by the unit in dissemination of
credible information about their company to a wide variety of business associate
s, including, collaborators, joint venture partners and other market participant
s. Besides, the rating report also serves as a guide to focus on areas of improv
ement and enables the SME to benchmark against competition. 4. INCREASED PUBLICI
TY -: CRISIL SME ratings are listed on CRISIL’s website and on CRISIL’s monthly publ
ications, the CRISIL SME CONNECT. This serves as a good source of publicity for
the rated entity and further enhances the credibility of the unit, a wide variet
y of banks, financial institutions and, foreign counterparties use the
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CRISIL PUBLICATION and website, to identify and research companies in greater de

tail. 5. SUPPORT FOR EXPORT INITIATIVES -: For exporters, CRISIL’s International L
inkage offers an additional advantage:STANDARD & POOR’s, a globally respected rate
d agency, is the majority shareholder in CRISIL, therefore, a CRISIL rating will
help establish the credentials with international customers. 6. A TOOL FOR SELF
IMPROVEMENT -: Along with its ratings, CRISIL provides detailed analytical repo
rts on the Strengths and Weaknesses of rated entities. Based on CRISIL reports,
one can take steps to strengthen their operations and become more efficient. Eac
h repots provides reliable and independent feedback from customers, suppliers an
d, banks. 7. AFFORDABLE -: CRISIL SME rating services, while being highly credib
le, are also very much affordable. CRISIL offers an attractive concession in the
rating fee for small enterprises. Also, NSIC Ltd., which is a corporation under
the ministry of MSME, GOVT, OF INDIA, provides 75% subsidy in rating fee for sm
all enterprises. Thus, the rating fee payable by the small enterprises ranges fr
om Rs.7456 to Rs.13236. for enterprises not registered as small enterprises, the
fee is higher, as the subsidy is not available from NSIC. CRISIL, with its reli
ability, width, and its depth of experience in rating services made a world of d
ifference to the corporate sector, when it pioneered the concept of rating in In
dia. CRISIL believes, it will make same difference to the SME Sector, with its S
ME sector ratings. HOW RATING DONE Step 1: Collect and process preliminary infor
mation
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Step 2: Analyze and assign the rating

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Step 3: Communication and publication of the rating

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CRISIL RATING REPORT

CONTENTS 1.NSIC-CRISIL PERFORMANCE AND CREDIT 2.RATING GRID 3.FACT SHEET 4.STREN
GTH AND RISK FACTORS 5.MANAGEMENT PROFILE 6.FUTURE PLANS 7.OWNERSHIP PATTERN 8.M
ANUFACTURING FACILITIES 9.BUSINESS PROFILE 10.PRODUCT PROFILE 11. CAPACITY UTILI
SATION 12.SUPPLIER INFORMATION 13.CUSTOMER INFORMATION 14.ORDERS IN HAND 15.MARK
ETING ARRANGEMENTS 16.OTHER INFORMATIONS 17.BANK AND INSURANCE DETAIL 18.FINANCI
AL PERFORMANCE 19.PROFIT & LOSS ACCOUNT 20. GRAPHS 21.BALANCE SHEETS 22. KEY RAT
IOS 23.SITE VISIT INFORMATION 24.PROMOTORS DETAIL
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Chapter - II INTRODUCTION TO THE PROJECT

II.1 OBJECTIVE OF THE PROJECT.
II.2 REASON FOR CHOICE OF PROJECT
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OBJECTIVES:
To find the level of awareness among industries about of credit ratings. To impa
rt the knowledge about credit rating to the industrialists of Batala . To check
the awareness level of industrialist regarding various government schemes of the
Ministry of MSME for the development of MSMEs.
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CHAPTER - III METHODOLOGY

INTRODUCTION TO MARKETING RESEARCH RESEARCH METHODOLOGY LIMITATION OF THE STUDY
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III.1 INTRODUCTION TO MARKETING RESEARCH

Market research and marketing research are often confused. Market research is si
mply research into a specific market. It is a very narrow concept. Marketing res
earch is much broader. It not only includes market research, but also areas such
as research into new product, or modes of distribution such as via the internet
. Here are a couple of definitions:
Marketing research is the function that links the consumer, customer, and public
to the marketer through information – information used to identify and define mar
keting opportunities and problems; generate, refine, and evaluate marketing acti
ons; monitor marketing performance; and improve understanding of marketing as a
process.
Marketing research specifies the information required to address these issues, d
esigns the methods for collecting information, manages and implements the data c
ollection process, analyzes, and communicates the findings and their implication
.
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III.2 RESEARCH METHDOLOGY

The present study was undertaken ”To Study the awareness of crisil SME rating know
ledge in focal point Ludhiana City”. This chapter gives as research design, data c
ollection method, sampling techniques, fieldwork carried out, limitations inhere
nt in the project and finally coverage of research work.
Research Design
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The research design is the pattern or an outline of research project working. It

is a statement of only the essentials of study being conducts follows a descrip
tive research design.
Data collection
Primary data was collected with the help of questionnaires provided by the compa
ny The questionnaire consisted of Multiple choice questions, close ended questio
ns, open ended question, so as to gain the information from the respondent.
The secondary data was collected through various websites, books, journals etc.
Sampling Plan
Sampling is an effective step of collection of primary data and has a great infl
uence on the quality of results. The sampling plan includes the population, samp
ling size and sampling design.
Population:
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The study aimed to include the industrialist of focal point Batala as to study,
the awareness of CRISIL SME RATING KNOWLEDGE in Batala. . Sample Size:
The sample size for the research was 140.
Sample Technique:
Tree sampling technique is used.
Time:
The research was conducted in the months of June and July, 2010.
Data Analysis & Interpretation:
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In the view of the present study, the required data was collected through struct
ured questionnaire designed by the company. The data so collected has been proce
ssed manually by editing, coding and tabulating. For analyzing the data, various
statistical techniques used to draw meaningful results.
III.3 LIMITATIONS OF THE STUDY
Though every care has been taken to make this report authentic in every sense, y
et there were a few uncomfortable factors, which might have their influence on t
he final report. Linking factors can be stated as: Time constraint Due to lack of
time i.e. 6 weeks, it was not possible to deeply study every aspect of customer
s and devote enough time for research work. But still sincere efforts were put t
o reach to the reliable conclusion. Data collection constraints There were many
problems regarding the collection of primary data which are as follows:
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1. As the questioners were filled during the working hours, the respondents had
little time to devote for filling the questionnaires. 2. Some respondents did no
t have their serious attitude towards the questionnaire and hence their response
s may not reflect the real picture 3. Some of the respondents were not candid en
ough to reveal all the required information. They might have given inflated or w
rong data. 4. The survey was conducted in the focal point region of Ludhiana cit
y. Thus the respondent belonged only to this region of country. This could have
brought biasness into the study. 5. However all the efforts were made to remove
the biasness but it cannot be denied that there is no possibility of individual
biasness on the part of respondent.
CHAPTER-IV ANALYSIS AND FINDINGS
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FINDINGS AND ANALYSIS OF MARKET RESEARCH PROJECT FINDINGS

TO KNOW ABOUT CRISIL SME RATING KNOWLEDGE:
TABLE NO.4 1
(showing sme rating knowledge) NO.OF PERSONS 21 PERCENTAGE 15%
KNOWLEDGE YES
NO
119
85%
This is evident from the table number-1 that there are very less industrialists
who have knowledge about SME rating. Only 15% of people have knowledge whereas r
est 85% is unaware.
Figure .1 ( showing the graphical representation of table no. 4.1)
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TO KNOW THE MARKET SHARE OF (MOU) BANKS :

TABLE NO. 4.2 (showing the market share of the (MOU) banks.) BANK NAME NO. OF PE
RSON HAVING ACCOUNT IN THESE BANKS HDFC 7 SBI 27 PNB 77 CBI 3 ICICI 5 OTHER 21
PERCENTAGE
5% 19.28% 55% 2.14% 3.57% 15%
From the table no. 4.2 it is clear that major part of the industry have their ac
counts in MOU banks specially PNB with 55% market share followed by SBI.
Figure 2 (showing the graphical representation of the table no. 4.2)
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To know about the TURNOVER of the various company in (lakh):

TO KNOW THE CERTIFICATION OF THE COMPANIES BY VARIOUS
AGENCIES : TABLE NO. 4.4(showing the number of companies certified) AGENCIES NO.
OF CERTIFIED 14 02 03 14 COMPANIES PERCENTAGE
ISO ISI OTHER NONE
40% 9.23% 6.15% 20%
According to the survey it is found that 40% of units are ISO certified and appr
oximate 25% units have SSI number and 20% of units have not registered under any
certificate.
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Figure 3(showing the graphical representation of the table no. 4.3)

TO KNOW THE NUMBER OF EMOPLOYED PERSONS:
TABLE NO. 4.5 (showing the number of employed persons) NUMBER OF EMPLOYEES 5-10
4 10-15 6 15-20 9 20-ABOVE 46
PERCENTAGE 6.15% 9.23% 13.84% 70.76%
In the table number 4.5 it is shown that most of the industries in focal point h
ave more than 20 employees working with them and only 14% of units have 15-20 em
ployees and only 6% of units have 5-10 employees.
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Figure 4(showing the graphical representation of the table 4.5)

5_10 6%
10_15 9% 15_20 14%
20above 71%
THOSE HAVING SME-RATING KNOWLEDGE AND ARE CERTIFIED
WITH ISO OR SSI: TABLE NO.4.6(SHOWING HAVING KNOWLEDGE AND ARE CERTIFIED)
ISO
SSI
OTHERS
14
4
3
67%
27%
6%
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In table number 4.6 it is shown that 67% of industries those which are aware abo
ut crisil SME rating are being certified by ISO and 27% of industries which are
aware have SSI number.
Figure 5 (showing the graphical representation of the table 4.5)
RELATIONSHIP BETWEEN TURNOVER AND HAVING KNOWLEDGE
ABOUT SME RATING: TABLE NO. 4.7(showing the relationship between the turnover an
d having knowledge about sme rating) TURNOVER PERCENTAGE NO. OF PERSONS 7% 100 – 2
00 lakh 200 above 1 14 93%
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From the above stated data it is found that major chunks of industrial area whic
h have knowledge about CRISIL SME RATING have turnover more than 200 lakh
Figure 6(showing the graphical representation of the table no.4.7)
FINDINGS:
* The knowledge of SME rating is found to be very less in the city. * Most of th
e industrial units deal with banks which are connected with CRISIL. * The turnov
er of most of the units is less than 2 crore. * I found that companies mostly ha
ve more than 20 employees working with them.
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* I have found that units which have knowledge about SME rating are being ISO ce
rtified. * Units having turnover more than 20 crore are aware of SME rating know
ledge.
CHAPTER – V SUGGESTIONS AND RECOMMENDATION
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SUGGESTIONS
* As people are not much aware about SME rating, so company should work on it. *
They should organize more industrial meetings so that people should know more a
bout CRISIL. * Company should work with banks to give more interest rate benefit
. * Company should request NSIC to give more subsidies to the SMEs. * Company sh
ould more advertise the rated companies so they can get more business.
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CHAPTER- VI CONCLUSION
Conclusion:
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After collecting data we found that the awareness of CRISIL SME credit rating is
 very less among the industrialist of BATALA. Industries which are being rated a
re satisfied but they are also not aware about all the benefits which they can g
et from it so if we make them aware about benefits it will be just like customer
delight. MOU banks have high market share specially SBI and CBI which have very
strong hold over the market so there are more chances for company to catch the
customer. The support from NSIC also very good as they are providing more than 6
0% subsidy for the rating. The marketing team of city is working very hard but s
till lot of effort is required by the company to show commanding presence in the
market.
BIBLIOGRAPHY
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BOOKS: Kotler, Philip, “Marketing Management”, (2004) Prentice Hall, India Kothari .
C.R., “Research Methodology Method and Technology”, New Age International Publicatio
n, Beri. G.S, “Marketing Research”, Tata Mc-Graw Hill, New Delhi.
WEBSITES:
WWW.CRISIL.COM WWW.NSIC.COM
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ANNEXURES
Survey on Awareness Level among MSMEs Date: ________________________ Name of the
_____________________________________________________________ Product _________
____________________________________________________ Place _____________________
______________________________________________________ Contact Person and ______
______________________________________________ Mobile: _________________________
_________________________________ E-mail: _____________________________________
____ Banker________________________________________ 1. Have you heard of Credit
Rating for MSMEs? a) Yes b) No 2. Has any Credit Rating Agency approached you fo
r rating? (please name if yes if No refer to Ques. 9) __________________________
_________________________________________ 3. If “Yes”, have you undergone the Credit
Rating exercise for your enterprise? a) Yes b) No (IF “NO”, MOVE TO QUES.9) 4. If “Ye
s”, what motivated you to opt for the rating? ------------------------------------
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56 Contact Designation number: company
a) Interest rate concession b) Credibility among customers and suppliers c) Repu
ted third-party opinion d) All of the above e) Any other (please _______________
____________________________________________ specify
5. Has the rating helped you in bringing improvement to your business? a) Yes b)
No
6. If “Yes”, what was the kind of improvement?
a) Management Strategy b) Finance c) Human Resource (HR) d) Marketing e) Product
ion Process f) All of the above
7. Has the rating helped you with your lenders and bankers? a) Yes b) No 8. If “Ye
s”, how did the rating help you in meeting your financial needs?
a) Getting adequate quantum of loan from bank b) Concession in interest rates c)
Relaxation in providing collaterals d) Reduction in transaction cost e) Faster
decision on the part of the lenders f) All of the above
9. If “No”, are you interested to go for rating and know the benefits of credit rati
ng? a) Yes b) No 10.Are you aware about the various government schemes of the Mi
nistry of MSME for the development of MSMEs? -----------------------------------
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a) Yes
b) No
11.Have you heard of or taken assistance under any of the following government s
chemes in the past? a) No b) if Yes, Kindly tick √
1. International Cooperation Scheme 2. Performance and Credit Rating Scheme 3. T
echnology Up gradation Fund Scheme (TUFS) for the textile sector 4. Marketing As
sistance Scheme 5. Rajiv Gandhi Udyami Mitra Yojana (RGUMY) 6. Trade Related Ent
repreneurship Assistance and Development (TREAD) Scheme for Women 7. Credit Link
ed Capital Subsidy Scheme for Technology Up gradation 8. Credit Guarantee Scheme
9. ISO 9000/ISO 14001 Certification Reimbursement Scheme 10.National Manufactur
ing Competitiveness Programme (NMCP) Schemes Under XI Plan: there are 10 schemes
under NMCP like Marketing Support, Lean Manufacturing, Mini Tool rooms, etc 11.
Micro & Small Enterprises Cluster Development Programme (MSE-CDP) 12.MSME MDA 13
.Mini Tool Rooms 14.Scheme of National Award 12.How many government schemes are
you aware of? a) None b) 1-5 schemes c) 6-10 schemes d) More than 10 schemes 13.
If yes, how would you rate the usefulness of the schemes?
a) Very useful b) Moderately useful c) Not useful 14. Some of these schemes are
operated through banks. Have the banks been supportive in channelizing assistanc
e under these schemes? a) Highly supportive b) Somewhat supportive c) Not suppor
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15. Which media do you think will be most effective to make these schemes better
known among the MSMEs? a) Radio b) TV c) Newspaper d) Website e) Any other sugg
estions …………………………………………………………………. 16.Do you have any suggestions for the government to add
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