CARE Ratings rating determination is a matter of experienced and holistic judgment, based on the relevant quantitative and qualitative factors affecting the credit quality of the issuer. The analytical framework of CARE Ratings' rating methodology is divided into two interdependent segments - The first deals with the operational characteristics and the second with the financial characteristics. Besides quantitative factors, qualitative aspects like an assessment of management capabilities play a very important role in arriving at the rating for an instrument.

Structured Finance rating encompasses both retail assets and corporate assets in the Indian context. The space covers both off-balance sheet and on-balance sheet structures. It focuses on opining on specific customised solutions and largely covers all forms of facilities whether extended in loan form or tradable instrument form.In the corporate assets space, partial/full guarantee structures, pooled issuances have recently become prevalent. In retail assets space, securitization and direct assignment are prevalent in India. CARE Ratings uses the suffix ‘(SO)’ for securitization transactions indicating that these are structured obligations.

CARE Ratings’ Infrastructure Sector Ratings (ISR) encompass ratings assigned to debt programs of issuers in the thermal power, solar energy, wind energy, hydro energy, transmission, power distribution companies, roads (toll, annuity, and hybrid annuity), telecommunications, airports, ports, and other such infrastructure-related sectors.CARE Ratings adopts a separate methodology for evaluation and assignment of Infrastructure Sector Ratings, distinct from corporate sector debt ratings as rating drivers for Infrastructure Sector Ratings are quite different from that of the corporate sector.

Some of the other rating services that CARE Ratings has under include Security Receipts Rating, Credit Quality Rating of Mutual Funds, and Capital Protection Oriented Scheme Ratings of Mutual Funds. Security Receipts are receipts or securities issued under ‘The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act’. A large variety of debt mutual fund schemes with different investment styles and objectives are now available in the Indian market. Today, from plain vanilla bonds to more complex derivatives, fund managers have a variety of options to construct their portfolios.