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CS Professional · Strategic Management and Corporate Finance · Role of Intermediaries in Fund Raising

Regarding credit rating for a public issue of debt securities in India, which statement is correct?

For a public issue of debt securities, the rating must come from a SEBI-registered credit rating agency and be disclosed in the offer document. Ratings are monitored and may be revised, and rating is not a requirement for equity IPOs.

  1. AThe rating must be obtained from a SEBI-registered credit rating agency and disclosed in the offer documentCorrect
  2. BRating may be obtained from any chartered accountant firm of the issuer's choice
  3. CRating is required only for equity IPOs
  4. DThe rating once assigned can never be revised by the agency

Explanation

Debt securities offered to the public must carry a rating from a SEBI-registered credit rating agency, and the rating is disclosed in the offer document. Ratings are kept under surveillance and can be upgraded, downgraded or withdrawn. Equity IPOs do not require a credit rating.

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