Every rating action by a SEBI-registered credit rating agency in India is accompanied by a published document. Depending on the agency it is called a press release, a rating rationale, or both — the press release is the disclosure, the rationale is the reasoning inside it. They are published on the agency’s own website and archived there.
Most readers take one number off the front page and stop. The document carries considerably more, including one section — the lender-wise annexure — that is arguably the most operationally useful part and the least read.
This guide walks the document section by section, in the order it usually appears.
Why the document exists at all
SEBI’s framework for credit rating agencies requires an agency to publish an issuer-specific press release for each rating action, to make the disclosure available in machine-readable format, and to maintain an archive of those disclosures on its website for at least ten years.
That is the reason a rating rationale is a public document rather than a subscriber product: the regulator’s design intent is durable, open, machine-readable disclosure. Layout differs by agency; the required substance does not vary much.
1. The header: entity, instrument, action
The first block names the rated entity and gives the rating action. Four things to read carefully.
The rated entity is a legal entity, not a group. A rating is assigned to a specific company. A parent, a subsidiary and a sister concern with similar names are separate ratings, sometimes at different agencies and different levels. Confirming the legal name — and, where quoted, the CIN — is the difference between reading the right rationale and the wrong one.
The instrument is named, and it matters. “Long-term bank facilities”, “short-term bank facilities”, “non-convertible debentures”, “commercial paper” are separately rated. An entity can hold several ratings at once. There is no single “company rating”.
The action type is a distinct field from the rating. Assigned, reaffirmed, upgraded, downgraded, placed on watch, withdrawn, or migrated to the issuer-non-cooperating category. A reaffirmation at BBB and a downgrade to BBB are the same rating and very different events.
The date is the date of the action, and it is the date every other fact in the document should be read against — the annexure especially.
The headline and the grades are separate facts, and occasionally they disagree — the wording says the rating moved one way and the grades on either side of the action say otherwise. It is rare, and it is worth spotting rather than reconciling away.
Reading the notation
Long-term scales run AAA down through D, with + and − modifiers from AA to C, and an outlook of Positive, Stable or Negative attached. Short-term scales are separate — A1 to A4, then D — and do not carry outlooks. Ratings for bank facilities carry an agency prefix in the released form (for example, the agency’s own initials before the symbol) because SEBI requires the rating symbol to identify the agency.
Two flags worth recognising immediately:
- Issuer Not Cooperating (INC). The issuer has stopped providing information. The rating is being maintained on the basis of best available, possibly dated, information. Anything in an INC release — including the annexure — should be treated as older than its publication date suggests.
- Rating Watch. A specific event is pending and the rating may move once it resolves. Different from an outlook, which is a directional view over a longer horizon.
2. The rationale: what the agency actually says
This is the narrative section, and it is usually structured in three parts.
Key rating strengths. What supports the rating — operating scale, promoter support, order book, established relationships, financial flexibility.
Key rating weaknesses. What constrains it — leverage, working capital intensity, client concentration, sector cyclicality, project execution risk.
Rating sensitivities. The most useful paragraph in the document and the one most often skipped. The agency states, usually with numeric triggers, what would cause an upgrade and what would cause a downgrade. Something like a specific leverage ratio sustained over a period, or a margin threshold. This is the agency committing in advance to the conditions under which its opinion changes, which makes it directly checkable against the next set of financials.
A practical habit: read sensitivities first, then strengths and weaknesses. The sensitivities tell you which of the strengths and weaknesses the agency actually weights.
3. Liquidity
Usually a short standalone paragraph, graded on a scale such as superior, strong, adequate, stretched or poor. It generally covers cash and equivalents, the headroom in working capital limits, the average utilisation of those limits over the last several months, and repayment obligations falling due over the next year.
Average utilisation of fund-based limits is a quietly informative number: it tells you how much of the sanctioned position is actually being drawn, which is the closest the document comes to an outstanding figure.
4. Key financials
A table of the agency’s own figures, typically two or three years plus an interim period, with the basis stated — standalone or consolidated, audited or provisional. Common lines are operating income, EBITDA, PAT, gearing, interest coverage and total debt to EBITDA.
Two cautions. The agency’s adjusted figures often differ from the audited statements, because agencies reclassify certain items; the document usually says so. And the period covered is a financial year end, so a release dated well after that year end is describing a position that has already aged.
5. The rated facilities table
Every facility covered by the action, listed with instrument type, amount, tenor where applicable, and the rating assigned to it.
For a bank loan rating this is where the sanctioned structure becomes visible: cash credit, working capital demand loans, term loans, letters of credit, bank guarantees, proposed-but-unallocated limits. Note that “proposed” limits are frequently included and are not drawn facilities — a total taken off this table without excluding proposed limits will overstate the position.
6. The lender-wise annexure
Here is the part most readers do not know is there.
For bank facility ratings, agencies commonly append an annexure — filed under names such as Annexure II, “Details of instruments/facilities”, or “Lender-wise details” — that maps each rated facility to the named bank providing it, with the amount.
In substance it is a table of this shape:
Illustrative — not real data.
| Lender | Facility | Amount |
|---|---|---|
| State Bank of India | Cash credit | ₹85 cr |
| Bank of Baroda | Term loan | ₹40 cr |
| HDFC Bank | Working capital demand loan | ₹25 cr |
| Union Bank of India | Bank guarantee | ₹18 cr |
That is a named banking relationship, published, with an amount against it, in a document anyone can download.
Why it is there
Its purpose is prudential rather than informational. A bank loan rating is used by the lending bank for capital computation, so the rating has to identify which facility of which lender it covers. In October 2022 the RBI addressed the fact that lender details were missing from a large number of press releases issued by external credit assessment institutions — attributing this to the absence of borrower consent — and ruled that a bank loan rating without that disclosure shall not be eligible for being reckoned for capital computation by banks, with effect from 31 March 2023. (RBI/2022-23/125, 10 October 2022)
The practical consequence for a reader: the annexure exists because the lender’s own regulator needs it to exist.
What it does and does not tell you
It tells you: which banks are named on the rated facilities, what type each facility is, and the sanctioned amount, as at the rating action date.
It does not tell you: the outstanding balance, the current position, or any lending relationship outside the rated facilities. And it is not always present — issuer consent governs disclosure, so a substantial share of rating actions publish no annexure at all.
How to read one carefully
- Anchor on the action date. The annexure is a sanctioned position as at that date, not today.
- Separate proposed from sanctioned. Unallocated or proposed limits often appear as their own line, sometimes without a lender.
- Watch the lender name. The same bank appears under several spellings across agencies and years, and merged banks appear under legacy names in older releases. Aggregating without reconciling names undercounts.
- Check for a consortium or multiple-banking note. Where present, it tells you whether the named set is a formal consortium or an independent set of bilateral facilities.
- Cross-read with the facilities table. They should reconcile. Where they do not, the difference is usually unallocated limits.
7. The tail sections
Rating history. Usually three years of prior actions on each instrument. The migration path is often more informative than the current level.
Complexity level of the instrument, disclosed under SEBI’s framework.
Analyst contacts and the disclaimer. The disclaimer routinely states that the rating is an opinion on credit risk, not a recommendation to buy, sell or hold, and not an audit of the issuer.
A short reading order
If you have five minutes with a rating press release:
- Header — entity, instrument, action type, date, any INC or Watch flag.
- Rating sensitivities — the agency’s own stated triggers.
- Liquidity — grade and average limit utilisation.
- Rated facilities and the lender-wise annexure — the structure, and who is behind it.
- Key financials — to check the sensitivities against.
Strengths and weaknesses last. They are the longest section and the most predictable.
Reading many of them at once
One press release is readable in five minutes. The difficulty is structural rather than individual: seven agencies, each publishing to its own site in its own layout, tens of thousands of actions, and an annexure that only becomes analytically interesting when you can read across all of them at the same time.
TatvaRatings parses those documents into structured records — borrowers, rating actions, rated facilities, key financials, rating drivers, and the lender-wise annexure — across seven SEBI-registered agencies, and indexes the annexure from the lender’s side.
Measured counts as at 30 August 2026. Floors, not totals — an annexure publishes only where the issuer consented to it.
The caveats from this page carry through unchanged and are stated in full on Data limits: the universe is rated borrowers only, 46.2% of rating actions publish an annexure, with the share ranging from 92.0% at one agency to 0% at another, and every record reflects a sanctioned position as at its action date.
Related
- Coverage — agencies, date range, counts
- Methodology — how the documents are parsed
- Sources — each agency’s public archive
- What CRILC is