Crisil looks at 10-fold increase in SME portfolios

Crisil expects to increase its rated portfolio in the small and medium enterprises (SME) segment by 10 folds in the next 3-4 years

Credit ratings agency Crisil today said it expects to increase its rated portfolio in the small and medium enterprises (SME) segment by 10 folds in the next three to four years.

The firm, which currently has 20,000 SME firms under its ratings portofolio, also said it expects more and more small scale industries to go for renewal of ratings.

"We see no reason why not two lakh. We don't know by what time...maybe 3-4 years. That's our medium-term goal," Crisil chief executive officer and managing director Roopa Kudva said here when asked about her company's plan to expand business.
She was speaking during an event on Crisil SME Ratings.

Ms Kuvda said that in a span of 12 months, since April 2010 till now, the firm has doubled its clientele base in the SME segment from 10,000 to 20,000.
"Henceforth, we also plan to launch specialised research on SMEs on a regular basis," she said.

Besides, 20,000 SMEs, Crisil also has rated potrfolios of over 6,200 large companies. Ms Kudva said around 40% of the SMEs come back for rating renewal. The Ministry of Small and Medium Enterprises subsides rating projects to the tune of 75% for the first year.

However, for renewals, SMEs have to bear the full cost which may go up to around Rs30,000. "Over time, our expectation is that it will go up to 50 per cent. Then we will be satisfied," Ms Kudva said.

When pointed out that the current renewal numbers seem too moderate, she said: "The 40% figure of renewal may look small but one has to understand that many firms have undergone ratings only during the past year and so are not eligible for renewal. Besides, others may not get the expected financial benefits and so do not go for renewal."

Commenting on the benefit of a ratings structure, Ms Kudva said it is very important for transparency and independent analysis in the Indian market.
SMEs employ 66 million workers and almost 1 million new jobs are created in the segment every year.

They account for 45% of the country's manufacturing output and 40% of Indian exports.

"Ratings are integral to development of a credit culture in India and development of a bond market. And a major part is that ratings help SMEs get better access to credit and banking facilities. Over 10% of the banking sector advances are to SMEs and scope is there to increase it," Ms Kudva said.

Crisil's client base covers SMEs with turnover between Rs10 lakh to Rs300 crore.


Paramount Printpackaging IPO opens 20th April

Paramount Printpackaging issue closes on 25th April

Paramount Printpackaging Ltd, a company operating fully automated manufacturing plant at Navi Mumbai, proposes to enter capital markets on 20th April with a public issue of 1,30,94,175 equity shares of Rs10 each through a book building process.

The issue closes on 25th April and the price band has been fixed at Rs32 to Rs35 per equity share of Rs10 each. The issue will constitute 49.04% of the fully diluted post issue paid-up capital of the company. The equity shares will be listed on the NSE and the BSE. Onelife Capital Advisors Limited is the Book Running Lead Manager to the Issue and Sharepro Services (India) Pvt Ltd is the registrar to the issue. ICRA Ltd has graded the Issue at 2/5.

The Paramount Printpackaging plans to use the net proceeds of the issue for setting up new facilities for manufacturing of high end duplex board cartons, shippers and printed corrugated boxes at Gujarat as well as augment its long term working capital requirements.


SBI Mutual Fund introduces Debt Fund Series 180 Days 17

SBI Mutual Fund new issue closes on 19th April

SBI Mutual Fund has launched SBI Debt Fund Series 180 Days 17, a close-ended income scheme.

The investment objective of the scheme is to provide regular income, liquidity and returns to the investors through investments in a portfolio comprising debt instruments such as government securities, AAA/AA+ bonds and money market instruments maturing on or before the maturity of the scheme. The new issue closes on 19th April. The minimum investment amount is Rs5,000.

CRISIL Liquid Fund Index is the benchmark index. Rajeev Radhakrishnan is the fund manager.


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