INDUSTRY EXPOSURE LIMIT
A disciplined, forward-looking framework to monitor sector risk and set prudent portfolio limits.
Assess underlying industry trends, normalise key financial ratios across sectors and convert insights into consistent exposure-limit decisions.
LIMIT SETTING METHODOLOGY
1. Access Industry Trend
Review key sectors on a quarterly basis, focusing on current conditions, cycle dynamics and emerging risk signals.
2. Normalise key financial ratios
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Sales growth
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RoA / ROCE
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PAT / EBITDA margins
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Current & quick ratios
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Net working-capital cycle
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Interest & cash-interest coverage
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Debt / equity and debt / EBITDA
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Free reserves to equity
3. Set and review limits
Translate the sector assessment into differentiated exposure appetite, monitoring intensity and periodic limit updates.
Framework for industry limit computation
Competitiveness
Growth quantum, drivers and quality
Growth potential
Extent of competition
Financial performance, fragmentation, competitive intensity and substitute
Demand–supply
Deficit / surplus outlook and likely implications
Characteristic
Industry-cycle stage, profit sensitivity and medium-term outlook
Cyclicality
Financial performance, fragmentation, competitive intensity and substitute
Buyer power
Product nature, supplier structure and financial position
Supplier power
External Factor
Government policy
Regulation, taxes, pricing, investment norms and policy-change impact
Availability, innovation pace, adoption and technology vintage
Technology risk
Industry risk score
A comparable view of sector creditworthiness and trajectory.
Exposure-limit calibration
Limits aligned with risk appetite, concentration tolerance and portfolio strategy.
Ongoing monitoring
Quarterly refreshes, early-warning indicators and escalation triggers.
Decision Outputs
Counterparty risk grading
A 360-degree credit assessment framework for consistent, explainable counterparty decisions.
Assess the financial resilience, management quality, business position and project-specific risk of each counterparty through a consistent, evidence-led scorecard.
360° Risk Assesment Framework
Counterparty grade
A transparent and repeatable view of overall credit quality.
Credit-decision support
Input into limits, pricing, approvals, covenants and transaction structuring.
Monitoring priorities
Clear signals for watchlist triggers, review frequency and remediation action.
Grading Outputs