Now grades for stocks
If you are looking for an independent assessment of a company’s equity shares before investing, then rating firm Crisil may have a solution for you.
If you are looking for an independent assessment of a company’s equity shares before investing, then rating firm Crisil may have a solution for you. The firm’s new product—Independent Equity Research—aims to help investors make better decisions by grading companies on their fundamentals. “The objective is to have more coverage on mid-cap and small-cap companies that don’t have equity research coverage,” says Roopa Kudva, Managing Director and CEO, Crisil.
Potential users, such as fund managers, say this will help them as well. “We have to read between the lines when analysing the sell side (brokers) recommendations and Crisil will fill the gap,” says Nilesh Shah, Deputy Managing Director, ICICI Prudential Asset Management Company.
The new product will also help access to capital for high quality small- and mid-cap companies. Sometimes due to unavailability of information, investors don’t invest in stocks of smaller companies despite good fundamentals. This in turn also makes it difficult for such companies to raise funds through equity. “Independent research will be a reality check for us. We will be able to know from an outsider what problems we have,” says Navpreet Singh, Joint Managing Director, Dolphin Offshore Enterprises India, a niche player in off-shore support services for oil & gas sector.
Crisil will charge for the research from the commissioning firm and make the report public if the research is commissioned by the company. In case of a fund house or an investor, it will depend on the agreement.
However, after the subprime crisis, rating firms themselves have been under the scanner. To overcome fears, Securities and Exchange Board of India (SEBI) Chairman C. B. Bhave suggests that Crisil should mention each time who has commissioned the research.
Potential users, such as fund managers, say this will help them as well. “We have to read between the lines when analysing the sell side (brokers) recommendations and Crisil will fill the gap,” says Nilesh Shah, Deputy Managing Director, ICICI Prudential Asset Management Company.
The new product will also help access to capital for high quality small- and mid-cap companies. Sometimes due to unavailability of information, investors don’t invest in stocks of smaller companies despite good fundamentals. This in turn also makes it difficult for such companies to raise funds through equity. “Independent research will be a reality check for us. We will be able to know from an outsider what problems we have,” says Navpreet Singh, Joint Managing Director, Dolphin Offshore Enterprises India, a niche player in off-shore support services for oil & gas sector.
Crisil will charge for the research from the commissioning firm and make the report public if the research is commissioned by the company. In case of a fund house or an investor, it will depend on the agreement.
However, after the subprime crisis, rating firms themselves have been under the scanner. To overcome fears, Securities and Exchange Board of India (SEBI) Chairman C. B. Bhave suggests that Crisil should mention each time who has commissioned the research.
