It’s a case of once bitten, twice shy for a large number of insurers and fund managers who no longer choose to blindly invest in AAA-rated corporate paper, but delve beyond the numbers into the management profile of the companies they invest in.
After the default by Infrastructure Leasing and Financial Services (IL&FS) last year, insurers, who are big buyers of NBFC paper, no longer blindly trust ratings and have beefed up their internal investment analysis wings. “Earlier, AAA rating was the main criterion for investing in non-convertible debentures, but IL&FS has been a big lesson for us all that we should not depend only on rating agencies.
