The Hindu Business Line : Crisil to grade broking outfits on 5-point scale

For the first time, Crisil is grading broking outfits and has assigned a `BQ-2' grading to Asit C. Mehta Investment Intermediates Ltd. Brokers are graded on a five-point scale ranging between `BQ-1' and `BQ-5', with `BQ-1' being the highest.

The grading is solicited and is an opinion on the risk management, client servicing, financial strength, quality of operations and services provided by the stock broking company.

"The regulator has been talking about grading for intermediaries and these ratings are a step in the same direction," said Mr Arun Panicker, Director, Financial Sector Ratings, Crisil.

"The grading of `BQ-2' centrally factors into Asit C. Mehta Investment's strong monitoring and risk management systems, standardised processes and procedures and effective outreach to the investor community," said Mr Panicker.

"Asit C. Mehta Investment has demonstrated sustained efforts to broaden its investor base in India by penetrating the smaller towns and cities, which have few organised broking houses," said Mr Tarun Bhatia, Head, Financial Sector Ratings, Crisil.

The grading also factors in the company's relatively small size of operations with a client base of around 75,000 and the small market share (0.5 per cent) in trading volumes. The rating house believes the company's relatively modest current net worth could potentially constrain its growth plans.

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