What Is Crisil Rating?

CRISIL Ratings basically represent the credit worthiness of an organisation and thereby help investors assess the risks associated with the financial instruments related to that organisation.

What Is Crisil Rating?

Credit Rating Information Services of India Ltd. or CRISIL is a company that provides risk and policy advisory services along with ratings and market research. It is a subsidiary of S&P – the latter owns a majority stake in CRISIL. Established in 1987, it is India’s first credit rating agency.

In this article, let’s understand the CRISIL meaning and understand how the CRISIL ratings help you decide your ideal mutual fund investment.

Understand CRISIL rating

Among other things, CRISIL has its subsidiary CRISIL Ratings Ltd. which is a pioneer of credit rating in India. It rates either financial instruments or entire organisations for credit worthiness. Such organisations may include manufacturing companies, financial corporations, banks, NBFCs, government and government bodies, PSUs, MSME, real estate projects, educational institutions and mutual funds. Financial instruments related to such organisations that are rated by CRISIL may include bonds, debentures, bank loans, commercial paper, collateralised securities etc.

CRISIL rating list helps potential investors make informed decisions related to investment in financial instruments and companies. It also helps companies raise capital by giving them a higher degree of legitimacy and approval – therefore, many organisations use their CRISIL ratings as a key point in their marketing.

For financial instruments and organisations, CRISIL rates the safety of the investment in the instrument or the organisation with symbols – CRISIL AAA shows the highest safety, followed by AA, A, BBB, BB, B C and finally Default or D respectively – sometimes CRISIL may add a (+) or a (-) to the symbol.

CRISIL releases rankings of mutual funds – the rankings are used by investors alongside other variables such as Net Asset Value, Asset Under Management, Sharpe Ratio etc.

What Types of Mutual Funds Are Ranked?

Equity Funds Categories Ranked by CRISIL:

CRISIL assesses various types of equity funds to provide rankings, including:

  • Large Cap Funds
  • Large & Mid Cap Funds
  • Flexi Cap Funds
  • Multi Cap Funds
  • Mid Cap Funds
  • Small Cap Funds
  • Value or Contra Funds
  • Focused Funds
  • ELSS (Equity Linked Savings Schemes)
  • Index Funds
  • Debt Funds Categories Ranked by CRISIL:

CRISIL evaluates the performance of different debt funds, covering:

  • Gift Funds
  • Banking & PSU Funds
  • Credit Risk Funds
  • Corporate Bond Funds
  • Medium to Long Duration Funds
  • Medium Duration Funds
  • Short Duration Funds
  • Low Duration Funds
  • Ultra Short Duration Funds
  • Dynamic Bond Funds
  • Money Market Funds
  • Liquid Funds

Hybrid Funds Categories Ranked by CRISIL:

Within the hybrid funds category, CRISIL assesses:

  • Aggressive Hybrid Funds
  • Conservative Hybrid Funds
  • Arbitrage Hybrid Funds

What Are the Rankings Categories?

 CRISIL Fund Rank Categories:

  • Rank 1: Exceptional Performance

Top-tier funds with outstanding and consistent performance.

  • Rank 2: Good Performance

Funds showcasing reliability and competence.

  • Rank 3: Average Performance

Mutual funds provide steady returns without outperforming top performers.

  • Rank 4: Below-Average Performance

Funds with challenges or weaker returns, require cautious consideration.

  • Rank 5: Relatively Weak Performance

Funds demonstrating weaker performance, necessitating careful assessment of associated risks.

Understanding CRISIL Percentile Scores:

  • Top 10 Percentile (Rank 1):

Funds in the 1st to 10th percentile signify exceptional performance.

  • 11th to 30th Percentile (Rank 2):

Rank 2 includes funds in the 11th to 30th percentile, indicating good and reliable performance.

  • Remaining Percentiles (Ranks 3, 4, and 5):

Ranks 3, 4, and 5 represent average, below-average, and relatively weak performance, respectively. Investors can use CRISIL rankings for informed decisions based on quarterly reports and percentile scores.

How is CRISIL Rating used in investment decisions?

The CRISIL rating shows the financial health of an organisation in terms of its ability to meet its liability obligations on time regularly. CRISIL regularly updates its ratings – hence if investors lack the time or the resources to make a particular investment decision, then they can refer to the CRISIL rating (and reports, if available) to come to a decision.

Understand CRISIL mutual fund rankings

CRISIL mutual funds rankings is shown on a scale of 1 to 5 – CRISIL Fund Rank 1 being the best (indicating a “very good performance”) and Rank 5 the worst. From a peer group, the top 10 percentile in CRISIL MF ranking is considered as Rank 1 and the next 20 percentile as Rank 2.

CRISIL Mutual Fund Rankings or CMFR are decided primarily on the basis of the following parameters –

  1. Superior Return Score – The returns of the fund in comparison to its portfolios
  2. Portfolio Concentration Analysis – A portfolio with too much diversification is rated low
  3. Mean Return and Volatility – Mean return is the daily average return based on NAV and volatility refers to the fluctuations in returns
  4. Quality of Asset – It refers to the likelihood of the debtors (in a debt fund or a hybrid fund) not defaulting on timely repayments
  5. Liquidity – Basically the ease with which a fund can liquidate its position
  6. Tracking error – Applicable only to funds that are tracking any indices, this measures the variation in the fund’s performance from the performance of the index that it is tracking
  7. Exposure to sensitive sectors – It measures the Industry Risk Score in order to assess the risks associated with the industry the stock/debt is related to
  8. Counting of negative returns – The downside risks associated with Arbitrage Funds are measured by this metric

However, it is important to remember that each fund operates in a particular context, which CRISIL mutual fund rankings takes into account when assessing its performance and creditworthiness.


It is clear that theCRISIL credit ratings are a very useful tool for both retail investors trying to judge one or two fixed income securities or equities as well as large investors and traders trying to make profits from trading in debt and equity. If you want to become an investor or a trader yourself, start reading up on financial markets and then try opening a Demat account with a trusted online brokerage platform.


What is CRISIL meaning?

CRISIL, short for Credit Rating Information Services of India Limited, is an Indian analytical company providing ratings, research, risk, and policy advisory services.

Who regulates rating agencies like CRISIL in India?

The Securities and Exchanges Board of India (SEBI) regulates the capital markets in India, including rating agencies like CRISIL.

How does CRISIL ratings affect your deposits?

CRISIL and other rating agencies rate corporations and other organisations offering deposits – some may fail to provide interest or principal on time and hence it helps if ratings are available for such organisations and instruments.