CRISIL today announced its entry into equity research, with the first set of the rating agency's Independent Equity Research (IER) reports released by C B Bhave, chairman, Securities and Exchange Board of India.
Through IER, CRISIL will provide independent assessments on the fundamentals and valuations of listed Indian companies.
Releasing the reports, Bhave said, "Independent equity research will introduce an unbiased analytical perspective on a company, independent of market players who may have aninterest in a transaction. It should also help improve the quality of research on Indian companies.
"Commenting on the new service, Roopa Kudva, managing director and CEO, CRISIL Ltd, said, ''This initiative is part of our constant endeavour to serve the market with innovative offerings. Through CRISIL IER, we aim to deliver high-quality independent equity research, and expand the coverage available for small and mid cap companies.''
CRISIL said in a media statement that the IER will address the two most important parameters in the investment process - fundamentals (fundamental grade), and valuation (valuation grade).
These grades will be on afive-point scale, with five being the highest grade, and 1 the lowest.
A detailed equity research report on each graded company explaining the grades will be available, free of charge, on CRISIL's website. A survey by CRISIL indicates that while the top 100 of around 3,500 active listed companies receive reasonable levels of equity research coverage, the remainder, by and large, do not.
CRISIL says its IER will help such companies become visible to a wider audience. For large companies,independent research will be a step towards greater transparency and disclosure, enhancing their credibility, it said.