VELAGAPUDI RAMAKRISHNA SIDDHARTHA

ENGINEERING COLLEGE
(AUTONOMOUS)
(Affiliated to JNTUK, Approved by UGC)
VIJAYAWADA-520007

DEPARTMENT OF BUSINESS MANAGEMENT

19MBA3001 – STRATEGIC MANAGEMENT

MINI PROJECT

S&P GLOBAL RATINGS LTD

REPORT SUBMITTED TO: REPORT SUBMITTED BY:

Dr. K. RAGHUVEER M.RAVI KIRAN
ASSISTANT PROFESSOR ROLL NO-228W1E0049

SIGNATURE OF THE PROFESSOR

0
 INDEX

COMPANY HISTORY:.............................................................................................................................2
SWOT ANALYSIS:...................................................................................................................................3
MARKETING MIX:..................................................................................................................................5
APPROVAL PROCESS:............................................................................................................................6
COMPETITORS:......................................................................................................................................8
FINANCIALS:........................................................................................................................................10
FINANCIAL WEAKNESS:.......................................................................................................................12
ISSUES:................................................................................................................................................19
FUTURE CHALLENGES:.........................................................................................................................21
CONCLUSION:......................................................................................................................................23

1
 S&P GLOBAL RATINGS

COMPANY HISTORY:

S&P Global Ratings

Type Subsidiary

Industry Financial services

 Poor's Publishing
Predecessor
 Standard Statistics

Founded 1860; 163 years ago

1941; 82 years ago (present corporation status)

Founder Henry Varnum Poor

Headquarters New York City, New York

,
The U.S.

Key people John Berisford

US$2.61 billion (2009)[1]
Revenue

Number of employees 10,000+

Parent S&P Global

Website www.spglobal.com/ratings

2
S&P Global Ratings (previously Standard & Poor's and informally known as S&P) is an
American credit rating agency (CRA) and a division of S&P Global that publishes financial
research and analysis on stocks, bonds, and commodities. S&P is the largest of the Big
Three credit-rating agencies, including Moody's Investors Service and Fitch Ratings. Its head
office is 55 Water Street in Lower Manhattan, New York City.
The company traces its history back to 1860, with the publication by Henry Varnum
Poor of History of Railroads and Canals in the United States. This book compiled
comprehensive information about U.S. railroad companies' financial and operational state.
In 1868, Henry Varnum Poor established H.V. and H.W. Poor Co. with his son, Henry William
Poor. He published two annually updated hardback guidebooks, Poor's Manual of the
Railroads of the United States and Poor's Directory of Railway Officials.
In 1906, Luther Lee Blake founded the Standard Statistics Bureau, with the view to providing
financial information on non-railroad companies. Instead of an annually published book,
Standard Statistics would use 5-by-7-inch cards, allowing for more frequent updates.
In 1941, Paul Talbot Babson purchased Poor's Publishing and merged it with Standard
Statistics to become Standard & Poor's Corp. In 1966, the company was acquired by The
McGraw-Hill Companies, extending McGraw-Hill into the field of financial information
services.
MISSION:
Our globally respected credit ratings paired with unparalleled thought leadership help
promote universal benchmarking, transparency, and business growth. We empower people
to make informed, confident decisions.

SWOT ANALYSIS:
A SWOT analysis for S&P Global Ratings, a prominent financial services company that
provides credit ratings and research, can help identify its strengths, weaknesses,
opportunities, and threats in the context of its business environment.

Strengths:

1. Reputation and Credibility: S&P Global Ratings is one of the most recognized and
respected credit rating agencies globally, which enhances its credibility in the financial
industry.
2. Global Presence: The company has a strong global presence, with offices and operations
in multiple countries, allowing it to serve clients worldwide.

3
3. Expertise and Experience: S&P Global Ratings has a long history and a wealth of
experience in credit rating and financial analysis, making it a trusted source of information
for investors and market participants.
4. Data and Research: The company possesses a vast amount of data and research, which it
can leverage to provide valuable insights and analysis to its clients.
Weaknesses:
1. Regulatory Scrutiny: The credit rating industry is subject to strict regulations, which can
increase compliance costs and limit the company's flexibility in certain aspects of its
operations.
2. Lawsuits and Reputation Risks: Errors or controversies in credit ratings can lead to
lawsuits and damage the company's reputation. S&P Global Ratings has faced legal
challenges in the past.
3. Competition: Competition in the credit rating industry is intense, with other major
agencies like Moody's and Fitch Ratings. This competition can affect pricing and market
share.
4. Dependence on Financial Markets: S&P Global Ratings' revenue is closely tied to the
health and activity of financial markets. Economic downturns can impact its business.
Opportunities:
1. Expanding Services: Diversifying its services beyond traditional credit rating, such as
offering more in-depth research and analytics, can open up new revenue streams.
2. Economic Growth in Emerging Markets: As emerging markets grow and develop, there
will be an increased need for credit ratings and financial analysis services.
3. ESG Ratings: The growing emphasis on Environmental, Social, and Governance (ESG)
criteria presents an opportunity for S&P Global Ratings to expand into ESG ratings and
analysis.
4. Technological Advancements: Leveraging advanced analytics, artificial intelligence, and
data science can help the company enhance its rating models and provide more accurate
and timely information to clients.
Threats:
1. Regulatory Changes: Changes in regulations governing the credit rating industry can
impact the company's operations, potentially increasing compliance costs and altering
business practices.
2. Market Volatility: S&P Global Ratings' business is susceptible to market volatility and
economic downturns, which can reduce demand for its services.
3. Competition: Ongoing competition from other credit rating agencies can limit the
company's market share and pricing power.

4
4. Reputational Risks: The company faces ongoing reputational risks if its ratings are
perceived as inaccurate or biased.
In summary, S&P Global Ratings has a strong reputation, global presence, and a wealth of
expertise, but it faces challenges such as regulatory scrutiny, competition, and economic
dependence. There are opportunities to expand into new services and markets, but it must
also be vigilant about regulatory changes and market fluctuations.

MARKETING MIX:
S&P Global Ratings, a prominent credit rating agency and financial services company, utilizes
the marketing mix, often referred to as the 4Ps, to promote its services and maintain its
competitive edge in the financial industry. Here's how the marketing mix applies to S&P
Global Ratings:

1. Product (Service): S&P Global Ratings primarily offers credit rating services and financial
research to clients. This includes assigning credit ratings to various financial instruments,
such as bonds and securities, as well as providing research reports and data analytics. They
may also provide risk assessment and credit risk management solutions.

2. Price: Pricing in the credit rating industry is typically tailored to specific services and
clients. S&P Global Ratings charges fees to issuers for rating their financial instruments.
Pricing often depends on factors like the complexity of the transaction, the issuer's
creditworthiness, and the specific type of security. The company may also offer subscription-
based pricing models for access to its research and data.

3. Place (Distribution): S&P Global Ratings operates on a global scale with offices and
operations in various countries. It serves a diverse range of clients, including governments,
corporations, financial institutions, and investors worldwide. The distribution of its services
is primarily through direct client relationships, but it also provides data and reports through
digital platforms, such as its website and data feeds.

4. Promotion: S&P Global Ratings promotes its services through various marketing and
promotional strategies, including:

Advertising: The company may advertise its services in financial publications, on its
website, and through online advertising.

Content Marketing: S&P Global Ratings often shares industry insights and research reports
to showcase its expertise and attract potential clients.

5
Client Engagement: Maintaining strong client relationships and offering personalized
services is crucial for its reputation and word-of-mouth marketing.
Events and Sponsorships: S&P Global Ratings may sponsor industry events and conferences
to increase visibility and credibility.
Public Relations: Building and maintaining a positive reputation in the financial sector is a
critical component of S&P Global Ratings' promotion efforts.

5. People: In the context of the marketing mix, "people" refers to the personnel who
interact with clients. S&P Global Ratings employs a team of experienced analysts,
economists, and financial experts who provide the expertise and analysis that underpin its
credit ratings and research.

6. Process: The process in the marketing mix relates to the systems and procedures used to
deliver the service. For S&P Global Ratings, this includes the credit rating process, research
methodology, quality assurance procedures, and compliance with industry regulations and
standards. Clients rely on a well-established process to ensure the accuracy and integrity of
the ratings and information provided.

7. Physical Evidence: In the service industry, "physical evidence" can be related to the
tangible elements that support the service. For S&P Global Ratings, this could include the
reports and publications they provide to clients, as well as the technology infrastructure and
platforms used to access their services.

In summary, S&P Global Ratings employs a well-defined marketing mix to promote and
deliver its credit rating and financial research services. The company focuses on providing
accurate and reliable information, maintaining strong client relationships, and staying
competitive in the dynamic financial services sector.

APPROVAL PROCESS:
S&P Global Commodity Insights follows a clearly defined process for introducing or making
changes to its methodologies. This process is based on full transparency and communication with
industry stakeholders aimed at gaining market acceptance for any proposed introduction or
changes to methodology.

Once we identify the need for a methodology change:

6
  We assign an individual as owner of the entire change process. This individual is
accountable for ensuring all processes are correctly followed.
 We publish a proposal in the form of a Subscriber Note and invites feedback over a
specified time period. The timelines may vary depending on the nature of the
change.
 After feedback is received and collated, we consider the information, make a
decision and publish a Subscriber Note. If we decide to proceed with the change, we
provide additional opportunity for feedback before the change is implemented.
 Any written feedback received by us in relation to a methodology consultation that
has not been designated as confidential will be made available to users upon
request.
 Any written feedback on methodologies that has not been marked as confidential
can be made available to users upon request.

S&P Global Commodity Insights employs an internal tracking tool for methodology changes
which has been developed to ensure controlled internal sign-off at each stage of any change and
also provides a clear audit trail.
We categorize methodology changes into types. (See table below.) All methodology changes are
formally communicated to the market through Subscriber Notes.

Factors, including external factors beyond the control of S&P Global Commodity Insights, may
necessitate changes to, or the cessation of, the benchmark. Such factors may include changes in
physical market conditions that could materially impact the parameters of an assessment.

We do not sponsor, endorse or market any specific financial product or provide investment
advice. Users of Platts benchmarks should nevertheless be advised that changes to, or the
cessation of, the benchmark may have an impact upon financial instruments that reference the
benchmark and users should contact the relevant product provider or fund manager for more
information.

We are committed to providing advance notice in a clear time frame that gives users sufficient
opportunity to analyze and comment on the potential impact of such proposed changes. Time
frames vary depending on our analysis of the overall circumstances of a particular change.

Methodology changes that materially alter an assessment and require an update to the
methodology specification are preceded by extensive bilateral discussions with market
stakeholders. Routine changes, such as seasonal quality or pipeline cycle changes, time-rolling
assessments, or clarifications, generally do not materially alter an assessment.

We may hold open public forums in which material methodology changes and feedback are
presented, and at which further feedback may be given.

When an assessment ceases to be relevant to the marketplace, we generally will provide at least
six months' notice of its intention to discontinue an assessment, although this timeline can be
shortened to three months when we expect the market impact to be negligible. If an unforeseen

7
 event causes a severe disruption in a particular market, the timeline for discontinuing an
assessment (sometimes on a temporary basis) may be shortened even further.

On occasion, we may need to respond urgently to changing market conditions, perhaps

precipitated or warranted by a serious event or market situation. Such changes are also
communicated in a Subscriber Note setting out what the issue is and what changes are to be
made.

COMPETITORS:

Founding Date 1925 1981 1975

Type Public Private Public

Tags Financial Servicesdata collectiondata Media & Entertainmentfinancial datafinancial Media &
managementfinancial data newsmagazinenewsplatform Entertainmentbusiness datain

Locations New York, US HQ New York, US HQ Toronto, CA HQ

Buenos Aires, AR Melbourne, AU Buenos Aires, AR

Melbourne, AU Sydney, AU Melbourne, AU

Sydney, AU Bruxelles, BE Pyrmont, AU

West Perth, AU Rio De Janeiro, BR Pyrmont, AU

São Paulo, BR São Paulo, BR Wien, AT

Halifax, CA Toronto, CA Bruxelles, BE

see more see more see more

Employees 39,950 75% increase 27,054 25,200

Valuation ($) 112.3 b N/A N/A

Twitter followers 38 k 658.5 k 156.6 k

Number of tweet 223 6 33

Average likes per 1.3 38.2 3.8

tweet

Percentage of tweets 69.51% 100% 96.97%

with engagement

Employee Rating 4.1 4.1 3.7

8
Financial
Revenue (est.) $11.2b (FY, 2022) $12.2b (Y, 2021) $6.6b (FY, 2022)

Cost of goods $3.8b (FY, 2022) N/A $1.3b (FY, 2022)

Gross profit $7.4b (FY, 2022) N/A $5.5b (FY, 2022)

Net income $3.5b (FY, 2022) N/A $1.4b (FY, 2022)

Operating⚠

Countries 25 (FY, 2021) 120 (Nov, 2021) N/A

1. Moody's Investors Service:

- Moody's is one of the main competitors of S&P Global Ratings. They provide credit
ratings and research similar to S&P. Analyze the market share, reputation, and the quality of
their credit assessments compared to S&P.

2. Fitch Ratings:
- Fitch Ratings is another major credit rating agency. Evaluate the range of financial
instruments they rate, their methodologies, and their global presence to understand their
competitive position.

3. DBRS Morningstar:
- DBRS was acquired by Morningstar, Inc., which expanded its global reach. Compare their
methodologies, areas of expertise, and presence in specific regions.

4. Kroll Bond Rating Agency (KBRA):

- KBRA is a newer entrant compared to the traditional "Big Three" agencies. Assess their
focus areas, innovation, and growth trends.
5. China Chengxin International Credit Rating (CCXI):
- For a global perspective, it's important to consider non-Western rating agencies like CCXI,
which is one of the leading credit rating agencies in China. Examine their areas of
specialization and growth strategies.

6. Japan Credit Rating Agency (JCR):

9
 - JCR is a prominent credit rating agency in Japan. Look into their market share, focus on
Japanese and international markets, and any notable specialties.

Key aspects to consider when conducting a competitor analysis of S&P Global Ratings
include:

- Market Share: Determine the market share of each competitor in different regions and
sectors.
- Quality of Ratings: Evaluate the accuracy and reputation of each rating agency's
assessments.
- Methodologies: Compare the rating methodologies and analytical approaches used by each
agency.
- Geographic Reach: Assess the global presence and reach of each competitor.
- Sector Expertise: Analyze their expertise in rating various financial instruments and
industries.
- Regulatory Environment: Understand how they comply with regulatory standards in
different regions.
- Innovation: Investigate any innovative approaches or tools used by these agencies in their
rating processes.
- Customer Base: Examine the types of clients and sectors they serve.
- Pricing: Consider the pricing strategies and fee structures employed by competitors.

It's worth noting that the credit rating industry is subject to regulatory changes and evolving
market dynamics. Therefore, the competitive landscape and the specific players in the
industry may have evolved since my last update in September 2021. To get the most up-to-
date information, I recommend consulting recent financial news, industry reports, and
official company sources.

FINANCIALS:

Years ended December 31 2022 2021 %change

Non-GAAP pro forma adjusted revenue $11,842 $12,382 (4)

10
Non-GAAP pro forma adjusted net income $3,765 $4,137 (9)

Non-GAAP pro forma adjusted diluted earnings

Per common share $11.19 $11.63 (4)

Dividends per common share $3.32 $3.08 8

Total assets $61,784 $15,026 N/M

Capital expenditure $89 $35 N/M

Total debt $10,956 $4,114 N/M

Equity $39,744 $5,536 N/M

S&P Global, formerly known as McGraw Hill Financial, is a prominent financial services
company that provides credit ratings, financial data, and analytics to businesses and
investors. The company is well-known for its credit ratings and research in various sectors,
including bonds, stocks, and other financial instruments.

When S&P Global issues shares of its stock to the public, it typically goes through a process
known as an initial public offering (IPO) or secondary offerings. Here's an overview of how
this process works:

1. IPO Preparation: Before issuing shares to the public, the company needs to prepare for
the IPO. This involves hiring investment banks to underwrite the offering and help set the
initial stock price. S&P Global would work closely with these banks to determine the number
of shares to be issued and other offering details.

2. Filing with the SEC: S&P Global would file the necessary documents with the U.S.
Securities and Exchange Commission (SEC) or the relevant regulatory authority in their
jurisdiction. These documents include the registration statement, prospectus, and other
required disclosures.

3. Marketing and Promotion: The company and its underwriters promote the upcoming IPO
to potential investors. This involves roadshows, investor meetings, and other marketing
efforts to generate interest in the offering.

11
4. Pricing: The final stock price is determined based on investor demand and market
conditions. This price is established through a process of book-building, where underwriters
collect orders from investors to gauge interest.

5. Trading Debut: On the day of the IPO, the shares are offered to the public for the first time
on a stock exchange, such as the New York Stock Exchange (NYSE) or NASDAQ. Investors can
then buy and sell S&P Global shares on the open market.

6. Post-IPO Reporting: S&P Global, as a publicly-traded company, is now subject to various

reporting and disclosure requirements, such as filing quarterly and annual financial reports
with the SEC.

It's worth noting that my knowledge is up to date only as of September 2021, and I do not
have access to real-time information. Therefore, if S&P Global has issued new shares or
undergone any significant corporate changes since that time, you should consult the latest
financial news and reports or the company's official website for the most current
information.

FINANCIAL WEAKNESS:
However, like any company, it may have financial weaknesses and challenges. Please note
that the specific financial situation of a company can change over time, so it's essential to
consult the latest financial reports and news for the most current information. Here are
some potential financial weaknesses or challenges that S&P Global may have faced or could
face:

1. Market Dependence: S&P Global Ratings relies on the financial markets and the issuance
of new debt and securities for a significant portion of its revenue. This makes the company
vulnerable to market fluctuations, including changes in trading volumes and interest rates.

2. Regulatory Changes: The credit rating industry is heavily regulated, and changes in
regulatory requirements can impact the business operations of S&P Global Ratings.
Regulatory changes can lead to increased compliance costs and potentially impact the
company's revenue streams.

12
3. Legal and Litigation Risks: Credit rating agencies, including S&P Global, have faced legal
and regulatory challenges related to the accuracy and objectivity of their credit ratings. Legal
settlements or judgments can have financial implications.

4. Competition: S&P Global Ratings faces competition from other credit rating agencies, such
as Moody's and Fitch. Intense competition can lead to pricing pressures and affect the
company's market share.

5. Cybersecurity Risks: Given the sensitive financial data and information they handle,
financial companies like S&P Global Ratings are susceptible to cybersecurity threats. Data
breaches or cyberattacks can result in financial losses and damage to their reputation.

6. Economic Downturns: Economic recessions and financial crises can impact the demand for
credit ratings and financial services. During such periods, the issuance of new debt and
financial instruments may decrease, affecting the revenue of the company.

7. Overreliance on Specific Clients or Industries: If S&P Global Ratings is heavily reliant on a

small number of clients or specific industries for a substantial portion of its revenue, it can
be vulnerable to financial weaknesses if those clients or industries face difficulties.

8. Global Economic and Geopolitical Factors: S&P Global operates in a global environment,
and economic and geopolitical factors can have a significant impact on its financial stability.
These factors may include changes in trade policies, currency exchange rates, and global
economic trends.

To assess the current financial health and weaknesses of S&P Global or any other company,
it's important to review their most recent financial reports, earnings statements, and any
updates or disclosures they have made to the public. Additionally, consider consulting
financial analysts and experts for a more in-depth analysis of the company's financial
performance and challenges as of the current date.

Exhibit 1

S&P Global

Condensed Consolidated Statements of Income

13
 Periods ended December 31, 2022 and 2021

(dollars in millions, except per share data)

(unaudited) Three Months Twelve Months

% %
2022 2021 Change 2022 2021 Change

$ $ $ $
Revenue 2,937 2,088 41 % 11,181 8,297 35 %

Expenses 2,227 1,191 87 % 8,162 4,087 N/M

Gain on dispositions (1) (7) (89) % (1,898) (11) N/M

Equity in income on unconsolidated subsidiaries (6) — N/M (27) — N/M

Operating profit 717 904 (21) % 4,944 4,221 17 %

Other expense (income), net 17 (11) N/M (70) (62) (14) %

Interest expense, net 86 25 N/M 304 119 N/M

(Gain) loss on extinguishment of debt, net (7) — N/M 8 — N/M

Income before taxes on income 621 890 (30) % 4,702 4,164 13 %

Provision for taxes on income 127 153 (17) % 1,180 901 31 %

Net income 494 737 (33) % 3,522 3,263 8%

Less: net income attributable to noncontrolling

interests (61) (62) 1% (274) (239) (15) %

$ $ $ $
Net income attributable to S&P Global Inc. 433 675 (36) % 3,248 3,024 7%

Earnings per share attributable to S&P

Global Inc. common shareholders:

Net income:

$ $ $ $
Basic 1.34 2.80 (52) % 10.25 12.56 (18) %

$ $ $ $
Diluted 1.33 2.79 (52) % 10.20 12.51 (18) %

14
Weighted-average number of common shares
outstanding:

Basic 323.9 241.0 316.9 240.8

Diluted 325.2 242.1 318.5 241.8

Actual shares outstanding at year end 321.9 241.0

S&P Global

Condensed Consolidated Balance Sheets

December 31, 2022 and 2021

(dollars in millions)

(unaudited) 2022 2021

Assets:

$ $
Cash, cash equivalents, and restricted cash 1,287 6,505

Other current assets 3,082 1,984

Assets of businesses held for sale 1 1,298 321

Total current assets 5,667 8,810

Property and equipment, net 297 241

Right of use assets 423 426

Goodwill and other intangible assets, net 52,851 4,791

Equity investments in unconsolidated subsidiaries 1,752 165

Other non-current assets 794 593

Total assets $ 61,784 $ 15,026

Liabilities and Equity:

15
 $
Short-term debt 226 $ —

Unearned revenue 3,126 2,217

Other current liabilities 2,413 1,449

Liabilities of businesses held for sale 1 234 149

Long-term debt 10,730 4,114

Lease liabilities — non-current 577 492

Deferred tax liability — non-current 4,065 147

Pension, other postretirement benefits and other non-current

liabilities 669 922

Total liabilities 22,040 9,490

Redeemable noncontrolling interest 3,267 3,429

Total equity 36,477 2,107

Total liabilities and equity $ 61,784 $ 15,026

Exhibit 3

S&P Global

Condensed Consolidated Statements of Cash Flows

Years ended December 31, 2022 and 2021

(dollars in millions)

(unaudited) 2022 2021

Operating Activities:

$ $
Net income 3,522 3,263

Adjustments to reconcile net income to cash provided by operating activities:

16
Depreciation 108 82

Amortization of intangibles 905 96

Deferred income taxes (353) 13

Stock-based compensation 214 122

Gain on dispositions (1,898) (11)

Lease impairment charges 132 31

Other 47 72

Net changes in other operating assets and liabilities (74) (70)

Cash provided by operating activities 2,603 3,598

Investing Activities:

Capital expenditures (89) (35)

Acquisitions, net of cash acquired 210 (99)

Proceeds from dispositions 3,509 16

Changes in short-term investments (2) (2)

Cash provided by (used for) investing activities 3,628 (120)

Financing Activities:

Payments on short-term debt, net (32) —

Proceeds from issuance of senior notes, net 5,395 —

Payments on senior notes (3,698) —

Dividends paid to shareholders (1,024) (743)

Distributions to noncontrolling interest holders (270) (227)

Proceeds from noncontrolling interest holders 410 —

Repurchase of treasury shares (12,004) —

Exercise of stock options and employee withholding tax on share-based

payments (103) (43)

Cash used for financing activities (11,326) (1,013)

17
Effect of exchange rate changes on cash (123) (82)

Net change in cash, cash equivalents, and restricted cash (5,218) 2,383

Cash, cash equivalents, and restricted cash at beginning of year 6,505 4,122

$ $
Cash, cash equivalents, and restricted cash at end of year 1,287 6,505

STOCK MARKET DATA:

As of October 17, 2023 Close SPGI

Stock Price $367.31

Change $ (0.23) (0.06)

Volume 1

52 Week Range 287.31 – 428.65 (TODAY)

Stock Price History High ($) Low ($)

One Month 392.12 355.00

Three Months 428.65 355.00

Year-to-Date 428.65 321.15

One Year 428.65 287.31

Three Year 484.21 279.32

Three Year Date 12/16/2021 10/13/2022

18
 Price Change (%) SPGI

One Day (0.06)

One Month (5.4)

Three Month (12)

9.66
YTD

One Year

STOCK SPLIT HISTORY:

Record Date Payment Date Distribution

May 6, 2005 May 17, 2005 2-for-1

February 24, 1999 March 8, 1999 2-for-1

March 28, 1996 April 26, 1996 2-for-1

May 9, 1983 June 1, 1983 2-for-1

June 30, 1967 July 17, 1967 2-for-1

March 10, 1961 March 17, 1961 3-for-1

July 25, 1956 August 8, 1956 3-for-1

July 24, 1953 August 3, 1953 2-for-1

ISSUES:
1.Billionaire Anil Agarwal-led Vedanta Resources might face some trouble yet again. S&P
Global Ratings, in its recent note, has said that any changes in Vedanta Resources’ financial
policy regarding debt transactions may result in a potential downgrade of its current ‘B-’
rating to ‘CCC’ or ‘CC’.It said that the rating can be downgraded if Vedanta tries a debt deal
without enough compensation or buys back debt at a lower price than its face value in
secondary markets, The Economic Times reported on Friday.

19
The negative outlook reflected the company's tight liquidity due to large debt maturities
until March 2025, S&P said.Vedanta Resources’ weakened access to cash flow from its
operating subsidiaries at a time of challenging external financing conditions has raised its
refinancing risk. The company has about $3 billion of debt and funding gap of $2 billion till
August 2024.The company also has interest expenses of $650 million. The $500 million that
Vedanta Resources just raised by selling part of its stake in the 64 per cent-owned Vedanta,
together with dividends and brand fees, should meet about half of the above debt-servicing
needs.

For the balance, Vedanta Resources will likely need to raise at least $600 million before its
$1-billion bond matures in January, and the rest before next August. Vedanta Resources is
now more exposed to funding risk given the significantly-reduced dividend capacity
of Vedanta Ltd.

2.In a statement issued, S&P Global said investors seek clarity on the credit impact of a string
of allegations against the group in a short-seller report published in late January, and on the
findings of a recently launched Supreme Court investigation.

"Downside risks could stem not just from restricted access to funding, but also from our
broader view on the quality of the group's governance. For example, we are likely to take a
negative rating action should any investigation uncover serious wrongdoing. This may
include previously undisclosed material related-party loans, cash leakage, or misreporting,"
S&P Globalsaid.

"Conversely, to revise the outlook to stable, we will need to be convinced that governance
practices in the group and funding access will improve in line with an investment-grade
credit profile," S&P Global added.According to S&P Global, in February 2023 it had revised to
negative the rating outlook on Adani Electricity Mumbai Ltd and Adani Ports and Special
Economic Zone Ltd., to reflect the governance risks and funding challenges of the wider
group. The credit rating agency also affirmed the 'BBB-' ratings on these entities.
Corporate governance refers to the system of rules, practices, and processes by which a
company is directed and controlled. It involves balancing the interests of various
stakeholders, such as shareholders, management, customers, suppliers, financiers,
government, and the community. Effective corporate governance is crucial for the long-term
success and sustainability of a company.

20
However, like any organization, S&P Global is not immune to corporate governance issues or
controversies. Here are some potential concerns or issues that can be associated with credit
rating agencies like S&P Global:
1. Conflict of Interest: Credit rating agencies can face conflicts of interest when they are paid
by the same entities they are rating. If a credit rating agency is overly reliant on fees from
the companies it rates, there may be an incentive to provide favorable ratings, potentially
compromising their objectivity.
2. Rating Accuracy: The accuracy and timeliness of credit ratings have been questioned in
the past, especially during major financial crises like the 2008 financial crisis. Critics argue
that rating agencies may not always provide accurate assessments of creditworthiness.
3. Transparency: Transparency in the methodologies and criteria used for credit ratings is a
concern. Critics argue that the inner workings of rating agencies are not always transparent,
making it difficult for investors to understand how ratings are determined.
4. Regulatory Oversight: Credit rating agencies are subject to regulatory oversight, but there
have been calls for increased regulation and scrutiny to mitigate potential issues related to
conflicts of interest and rating accuracy.
5. Litigation and Legal Issues: Credit rating agencies may face legal challenges from entities
that believe they were rated unfairly or inaccurately. Lawsuits and regulatory actions can
have reputational and financial consequences for the agency.
6. Competition: The credit rating industry has faced criticism for being dominated by a few
major players, which may limit competition and innovation in the sector.
It's important to note that many of these issues have been addressed to some extent
through regulatory reforms in the aftermath of the 2008 financial crisis, such as the Dodd-
Frank Wall Street Reform and Consumer Protection Act in the United States.

Investors and market participants should exercise due diligence and consider multiple
sources of information when making financial decisions, rather than relying solely on credit
ratings. Furthermore, companies like S&P Global need to continuously work to enhance their
corporate governance and maintain high standards of transparency and objectivity to
maintain their credibility in the financial industry.

FUTURE CHALLENGES:

What We're Watching: Key Themes 2023

21
Confronting Credit Headwinds

Reshuffling Capital Flows

What We're Watching

Navigating Geopolitical Uncertainty

Seeking Energy and Climate Resilience

Managing Crypto and Cyber Disruption

Challenges from geopolitical conflicts, high levels of inflation, and supply chain disruption are
forcing companies to reassess how they manage and monitor their risk exposure. We are uniting
credit and risk management professionals to discuss the challenges and opportunities arising in
Europe.

This event is an exclusive opportunity to hear directly from speakers from S&P Global Market
Intelligence, S&P Global Ratings, and Industry Leaders as they discuss global disruption,
macroeconomic and sector outlooks, the credit risk impact of Climate Change, and transformation
trends impacting the credit risk workflow.

Corporate governance refers to the system of rules, practices, and processes by which a company
is directed and controlled. It involves balancing the interests of various stakeholders, such as
shareholders, management, customers, suppliers, financiers, government, and the community.
Effective corporate governance is crucial for the long-term success and sustainability of a company.

S&P Global (formerly known as Standard & Poor's) is a prominent financial services company
known for its credit ratings, market intelligence, and other financial research services. S&P Global
plays a critical role in financial markets, providing credit ratings for companies and governments,
which help investors make informed decisions.

However, like any organization, S&P Global is not immune to corporate governance issues or
controversies. Here are some potential concerns or issues that can be associated with credit rating
agencies like S&P Global:

1. Conflict of Interest: Credit rating agencies can face conflicts of interest when they are paid by the
same entities they are rating. If a credit rating agency is overly reliant on fees from the companies it
rates, there may be an incentive to provide favorable ratings, potentially compromising their
objectivity.

22
2. Rating Accuracy: The accuracy and timeliness of credit ratings have been questioned in the past,
especially during major financial crises like the 2008 financial crisis. Critics argue that rating
agencies may not always provide accurate assessments of creditworthiness.

3. Transparency: Transparency in the methodologies and criteria used for credit ratings is a
concern. Critics argue that the inner workings of rating agencies are not always transparent,
making it difficult for investors to understand how ratings are determined.

4. Regulatory Oversight: Credit rating agencies are subject to regulatory oversight, but there have
been calls for increased regulation and scrutiny to mitigate potential issues related to conflicts of
interest and rating accuracy.

5. Litigation and Legal Issues: Credit rating agencies may face legal challenges from entities that
believe they were rated unfairly or inaccurately. Lawsuits and regulatory actions can have
reputational and financial consequences for the agency.

6. Competition: The credit rating industry has faced criticism for being dominated by a few major
players, which may limit competition and innovation in the sector.

It's important to note that many of these issues have been addressed to some extent through
regulatory reforms in the aftermath of the 2008 financial crisis, such as the Dodd-Frank Wall Street
Reform and Consumer Protection Act in the United States.

Investors and market participants should exercise due diligence and consider multiple sources of
information when making financial decisions, rather than relying solely on credit ratings.
Furthermore, companies like S&P Global need to continuously work to enhance their corporate
governance and maintain high standards of transparency and objectivity to maintain their
credibility in the financial industry.

CONCLUSION:
In conclusion, S&P Global Ratings Ltd appears to have adopted a strategic approach that
emphasizes diversification, technological adoption, global expansion, and a commitment to
regulatory compliance. The credit rating industry continues to evolve, and the company's
success will depend on its ability to adapt to changing market dynamics and effectively
address industry-specific challenges while continuing to provide reliable credit assessment
and research services to its clients. For the most current and specific information about the
strategic management of S&P Global Ratings Ltd, I recommend reviewing the company's
latest reports, disclosures, and statements from its leadership.

23