Q. What does Credit Rating convey?
A.
Credit Rating is an indicator of the company’s ability to meet its obligated debt repayments. A symbol is usually assigned, to communicate a credit rating. However, credit rating is not an advice to buy, hold or sell a debt instrument.
Q. What is Credit Rating process?
A.
ONICRA ratings are based on comprehensive evaluation of government policies, regulatory environment, industry scenario, management competency, market risks, competitive position, balance sheet strength, liquidity position, cash flow position and sensitivity to changes in operating environment.
Q. What is the eligibility criteria for NSIC-ONICRA rating?
A.
Any registered small scale industry (SSI) unit having investment in plant and machinery up to Rs. 5Crore in case of manufacturing sector and Rs. 2 Crore in case of service sector is eligible for rating.
Q. What is the validity for ONICRA rating?
A.
NSIC-ONICRA rating is valid for one year from the date of issuance of the certificate.
Q. Does ONICRA assigns rating if my unit is new?
A.
Under NSIC scheme, ONICRA does not assign rating if the unit is new. However, in non NSIC scheme, if you are having MSME registration certificate with you, we can assess your case irrespective of how many years you have been in to existence.
Q. Is ONICRA offering any discounts on the rating fees?
A.
In non NSIC scheme ONICRA does not offers any discount. However, under National Small Industry Corporation Limited (NSIC) duly approved scheme MSME’s get subsidy of 75% on the fees. They only have to pay 25% of the rating fees which makes the rates competitive and affordable.
Q. Are NSIC - ONICRA ratings accepted by the banks?
A.
As Indian Banks Association (IBA) has approved this scheme, NSIC - ONICRA ratings are accepted by the banks. We have also signed up Memorandum of Understanding (MOU’s) with 25 leading banks and financial institutions wherein the MSME does can avail interest rate benefits ranging from 0.25% to 1%.
Q. Are audited financial statements important input for credit rating?
A.
An audit is done to ascertain the accuracy and correctness of financial statements, therefore audited financials are an important input for credit ratings. However, apart from audited financial statements other sources of information and; industry inputs, comparative analysis and management interaction are used to determine the rating of the firm.
Q. What does ONICRA do, in case if adequate information is not provided by the issuers?
A.
As limited information is available in the public domain in the Micro, Small and Medium Enterprise (MSME) space, therefore ONICRA may not assign a rating if the client does not provide sufficient information. Moreover, even in the above case if ONICRA assigns a rating to the client, it would be conservative in its approach.
Q. How does ONICRA maintains independence of Ratings?
A.
The rating team functions independently of business development department. Moreover, the ratings are based on comparative analysis and collective opinion of the Rating Committee members.
Q. Benefits of Ratings?
MSMEs
Aids to deal with large companies
Helps in Marketing and serve as first point to generate interest among potential trading partners
Provides a Tool for self correction & self improvement
Increases credit acceptability with banks and financial institutions
Aids in getting concession in interest rate on NSIC’s Raw Material Assistance / Bank guarantee (BG) Schemes
Creates confidence among buyers and suppliers by establishing credibility & goodwill
Investors
Offers independent third-party opinion
Provides easy tool for evaluating MSME’s
Simplifies decision making process
Acts as a risk and pricing assessment input
Q. What are the benefits in marketing/export?
A.
Rating is accepted and recognized by buyers and suppliers. If you are competing for a deal and you got your NSIC-ONICRA rating done then definitely you will get advantage over competitors.
SE 1B : The rating
indicates "Highest Performance
Capability and Moderate Financial Strength"