Crisil has carried out this exercise on behalf of the Confederation of Indian Industry (CII).
The comprehensive and objective analytical framework has been developed to assist banks, institutions and other lenders in evaluating film and television software producers.
Lenders could use the framework to systematically classify risks and objectively assess various risk issues before determining their exposure levels and interest rates for the entertainment industry.
As for borrowers, so far, they have sourced funds at exorbitant interest rates from the informal market. Now, the grading framework would act as a key facilitator in accessing institutional funds.
In case of film producers, it would assign a grade for a specific movie indicating the rating agencys opinion on the producers ability to complete a particular project and recover costs incurred.
It is, therefore, possible that different movies of the same producer could get different grades.
For television software producers, which are generally constituted as corporate entities, the grade would indicate Crisils opinion on credit worthiness of the entity.
Thus, the grade would reflect relative ability of the rated company to meet graded debt obligations.
Said Crisils executive director and chief rating officer, Roopa Kudva: The CII-Crisil report is the third important milestone in the entertainment industrys evolution into a transparent mature sector.
The first two milestones being accordance of industry status to the film industry in 1998 by the Ministry of information and broadcasting and recognition of entertainment industry as an approved activity under industrial concerns as per the Industrial Development Bank of India Act, (1964).