Policy for placing ratings on Rating Watch

Policy for Placing Ratings on Rating Watch

There could be many developments that may take place in the affairs and functioning of various rated entities, the implication on debt servicing ability of which may have to be further examined. These developments include announcement for merger, demerger, taking over of a company, announcement/ implementation of a large project, sale or acquisition of equity stake in the company, change of management, resignation of key managerial personnel etc.

In such cases, Infomerics initiates a review exercise with a view to assess the impact of such developments on the future debt servicing ability of the company. Wherever Infomerics feels that assessment of the impact of the development requires further information/clarifications and believes, prima-facie that such assessment might possibly result in change in rating, Infomerics places such rating under Rating Watch. Such rating watch may be of three kinds:

• ‘Rating watch with positive implication’ or
• ‘Rating watch with negative implication’ or
• where the direction of the implication is not clear or may be subject to emerging developments, then the rating may be placed on ‘Rating Watch with developing implications’.  

Once the desired information is received and evaluation exercise is completed, a review note is placed before the RC which may, after detailed examination of the facts, decide to either continue the rating on Rating watch or remove the Rating watch and assign an appropriate rating. It may be noted that placing ratings on rating watch does not always imply an imminent change in rating. The time frame for resolving ratings under rating watch would generally be ranging between 45 to 90 days.

*Policy Of Placing Ratings on Rating Watch (Version III) is approved in the BM dated 04th July 2023.

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