A bond rating is a credit quality assessment assigned to a fixed-income instrument — government bond, corporate bond, NCD, or structured security — by a registered credit rating agency, indicating the issuer's ability and willingness to meet its debt obligations in full and on time. In India, SEBI-registered credit rating agencies include CRISIL (a subsidiary of S&P Global), ICRA (affiliated with Moody's), CARE Ratings, India Ratings (a Fitch affiliate), Acuité Ratings, and Brickwork Ratings. Bond ratings use alphanumeric scales — CRISIL, ICRA, and CARE use ratings ranging from AAA (highest credit quality, negligible default risk) through AA, A, BBB (investment grade) down to BB, B, C, and D (speculative grade to default). AAA-rated bonds are considered the safest corporate instruments in India — typically issued by the strongest NBFCs, PSUs, and blue-chip corporates. SEBI mandates that all publicly issued NCDs carry a minimum investment-grade rating. For Indian investors choosing between corporate bonds and government securities, the bond rating difference — the credit spread — directly quantifies the additional return required to compensate for the incremental credit risk of the corporate issuer versus the risk-free sovereign.
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