Mr. Rohit Chugh, associate director at CRISIL recently held a talk in campus on Rating Agencies and their relevance.
Clearing a lot of myths about rating agencies, he outlined that the basic premise a rating agency works on should not be sidelined which is "the problem of default". "We basically try to present the ability and willingness of an entity to meet its debt obligations in a way that is easy to understand". Mr. Chugh contested the concept of a 'rating watch' pointing out that the idea signifies a lack of opinion and that is not what one expects from a rating agency.
The Standard and Poor's rating of India is at BBB- with a negative outlook which is a worrying sign for the economy as it faces the chance of a downgrade amidst several warnings. This puts us in line with countries like Italy and Spain which are spiraled in the Euro crisis.
Mr. Chugh spoke of his experiences at CRISIL and said one test he often faces is to evaluate the willingness of an enterprise to pay back its debt. As easy as it sounds a lot of factors go into analyzing this and it is a real challenge. So what would be the major indicators you base your opinion on, asked a student? "Well, its majorly about Cash and Debt, says Mr. Chugh, they can often tell you what the story is".
"It was an enlightening session, managing debt is one of the primary objects of a finance professional and mismanaging debt the spark that lights up a crisis" said Mridul Singh, a Part 1 student at MFC.
Clearing a lot of myths about rating agencies, he outlined that the basic premise a rating agency works on should not be sidelined which is "the problem of default". "We basically try to present the ability and willingness of an entity to meet its debt obligations in a way that is easy to understand". Mr. Chugh contested the concept of a 'rating watch' pointing out that the idea signifies a lack of opinion and that is not what one expects from a rating agency.
The Standard and Poor's rating of India is at BBB- with a negative outlook which is a worrying sign for the economy as it faces the chance of a downgrade amidst several warnings. This puts us in line with countries like Italy and Spain which are spiraled in the Euro crisis.
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| Mr. Chugh addressing students |
Mr. Chugh spoke of his experiences at CRISIL and said one test he often faces is to evaluate the willingness of an enterprise to pay back its debt. As easy as it sounds a lot of factors go into analyzing this and it is a real challenge. So what would be the major indicators you base your opinion on, asked a student? "Well, its majorly about Cash and Debt, says Mr. Chugh, they can often tell you what the story is".
"It was an enlightening session, managing debt is one of the primary objects of a finance professional and mismanaging debt the spark that lights up a crisis" said Mridul Singh, a Part 1 student at MFC.
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