CARE launches 'fundamental grading' of SMEs
Updated: Mar 26, 2013 03:53:21pm
New Delhi, Mar 26 (KNN) SMEs with better business fundamentals may find it easier to raise funds through the SME platform at stock exchanges in NSE and BSE after a new grading system has been launched for them by Credit Analysis and Research Limited (CARE ratings).
“Indian Small and Medium Enterprises (SME) have traditionally been facing a constraint of lack of adequate and timely finance. With the introduction of SME platform at stock exchanges, BSE SME Exchange and NSE Emerge, the SMEs are now able to raise equity capital through listing at these platforms where relaxed SEBI guidelines are also applicable.
With this development, it was important to classify the entities with better business fundamentals for taking a long term investment view. This product is expected to fill this gap,” said a press release from CARE.
Credit Analysis and Research Limited (CARE Ratings) had launched a new product called, ‘SME Fundamental Grading’ in February 2013.
Also, the product is expected to aid investors in taking an informed investment decision based on the fundamentals of Small and Medium Enterprises (SMES) and will assist the SMEs to differentiate from others, thereby facilitating fundraising.
SME fundamental grading will be an independent and professional opinion on the fundamentals of a SME. It will be a relative assessment in relation to other Indian SMEs, involving an in-depth assessment of various quantitative and qualitative parameters of the entity.
Quantitative parameters include growth prospects of the industry, financial strength and operating performance of the entity. Qualitative parameters primarily include management capability, an evaluation of the promoters, accounting policies and corporate governance practices.
CARE will grade the SMEs' fundamentals on a five-point scale, from fundamental grade 5/5 (the highest grade, indicating 'strong fundamentals') to the lowest score, fundamental grade 1/5 (indicating 'weak fundamentals'). A score of 4/5 will indicate very good fundamentals; 3/5 will indicate good fundamentals, and 2/5 will indicate modest fundamentals.
The first two companies to be rated on the new scale are Ashapura Intimate Fashions Limited (AIFL) and Sarda Energy and Minerals Ltd (SEML). (KNN)
“Indian Small and Medium Enterprises (SME) have traditionally been facing a constraint of lack of adequate and timely finance. With the introduction of SME platform at stock exchanges, BSE SME Exchange and NSE Emerge, the SMEs are now able to raise equity capital through listing at these platforms where relaxed SEBI guidelines are also applicable.
With this development, it was important to classify the entities with better business fundamentals for taking a long term investment view. This product is expected to fill this gap,” said a press release from CARE.
Credit Analysis and Research Limited (CARE Ratings) had launched a new product called, ‘SME Fundamental Grading’ in February 2013.
Also, the product is expected to aid investors in taking an informed investment decision based on the fundamentals of Small and Medium Enterprises (SMES) and will assist the SMEs to differentiate from others, thereby facilitating fundraising.
SME fundamental grading will be an independent and professional opinion on the fundamentals of a SME. It will be a relative assessment in relation to other Indian SMEs, involving an in-depth assessment of various quantitative and qualitative parameters of the entity.
Quantitative parameters include growth prospects of the industry, financial strength and operating performance of the entity. Qualitative parameters primarily include management capability, an evaluation of the promoters, accounting policies and corporate governance practices.
CARE will grade the SMEs' fundamentals on a five-point scale, from fundamental grade 5/5 (the highest grade, indicating 'strong fundamentals') to the lowest score, fundamental grade 1/5 (indicating 'weak fundamentals'). A score of 4/5 will indicate very good fundamentals; 3/5 will indicate good fundamentals, and 2/5 will indicate modest fundamentals.
The first two companies to be rated on the new scale are Ashapura Intimate Fashions Limited (AIFL) and Sarda Energy and Minerals Ltd (SEML). (KNN)
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