Credit Rating G u i d e l i n e s relaxed for debt issues

Requirement of Credit Rating: For public/ rights issues of debt instruments, SEBI (DIP) Guidelines, 2000 presently stipulate credit rating to be obtained from not less than two credit rating agencies. With a view to reduce the cost of issuance of debt instruments, it has now been decided that credit rating from one credit rating agency would be sufficient. Requirement of Below investment limit: SEBI (DIP) Guidelines, 2000 currently require that the debt instruments issued through a public/rights issue shall be of at least investment grade. In a disclosure based regime, it should be left to the investor to decide whether or not to invest in a non-investment grade Debt Instrument. Given this, and in order to develop market for Debt Instruments, it has been decided to allow issuance of bonds which are below investment grade to the public to suit the risk/return appetite of investors.