Mumbai, 16thNovember 2021: Rubix Data Sciences Pvt Ltd (Rubix), a technology and analytics-based B2B Risk Management and Monitoring platform,released itsQuarterly Risk Transition Report covering changes in risk from Q1 FY 2022 (April – June 2021) to Q2FY 2022(July – September 2021).
At the end of each quarter of the Indian financial year (April - March), Rubix compares the data of how Indian business entities in its monitoring portfolio have performed versus the prior quarter, from a statutory compliance and credit rating perspective.
The key parameters being monitored each quarter are GST Filings, Provident Fund Filings and Credit Ratings.
The purpose of the Quarterly Risk Transition Report is to see if the business entities being monitored show any deterioration or improvement from a statutory compliance or external credit rating perspective as compared with the prior quarter. There could be several reasons for non-compliance with statutory requirements for paying of GST and Provident Fund and filing the Returns. Of these, cash flow delays or liquidity problems that business entities face are probably the most important drivers for non-compliance. Similarly, changes in Credit Ratings need to be examined closely in order to understand the reasons behind the change.
A deterioration in any of the above parameters for the business entities should raise red-flags and serve as early warning signals for those monitoring the portfolio.
Below are the key findings of theRubix Quarterly Risk Transition Report for Q2 FY 2022:
1. The GST Quarterly Monitoring Report is prepared basis 10,973 business entities and providesan apple-to-apple comparison between both quarters. The business entities being monitored belong to more than 35 sectors of the economy.
o As per the the Rubix GST Compliance Score of 813 Business Entities (only 7% of the total number being monitored) deteriorated between Q1 and Q2 FY 2022. In the prior quarter, 32% of the business entities had witnessed a drop in their Rubix GST Compliance Score.
o In all the quarters since Q4 FY 2020, the Rubix GST Compliance Score has deteriorated in a higher percentage of business entitiesthan 7% recorded in Q2 FY 2022.
o This clearly indicates a substantial improvement in the financial health of business entities in India in Q2 FY 2022 compared with the prior quarter.
(Please see table and chart on next page)
Change in Rubix GST Compliance Score between Q1FY 2022 and Q2FY 2022
Type of Change Number of Companies / Firms %
Deterioration 813 7%↓
Improvement 3,311 30%↑
No Change 6,849 63%↔
Grand Total 10,973 100%
Quarterly Risk Transition of GST Compliance
Q4 FY 2020 (Jan – Mar 2020) to Q2 FY 2022 (Jul – Sep 2021)
2. The Provident Fund (PF) Quarterly Monitoring Reportis prepared basis 4,335business entitieswhose PF filing details were available for both quarters.
o The Rubix PF Compliance Score of 860 Business Entities (only 20% of the total number being monitored) deteriorated in Q2 FY 2022, compared with the prior quarterduring which 40% of the businesses entities had witnessed a drop in their Rubix PF Compliance Score.
o There was an improvement in the Rubix PF Compliance Score of 41% of the business entities in Q2 FY 2022versus 31% improvement recorded in Q1 FY 2022.
o The above trend reiterates the improvement in the overall risk environment in India in Q2 FY 2022.
(Please see table and charton the next page)
Change in Rubix PF Compliance Score between Q1FY 2022 and Q2 FY 2022
Type of Change Number of companies / firms %
Deterioration 860 20%↓
Improvement 1,795 41%↑
No Change 1,680 39%↔
Grand Total 4,335 100%
Quarterly Risk Transition of PF Compliance
Q4 FY 2020 (Jan – Mar 2020) to Q2 FY 2022 (Jul – Sep 2021)
3. The Quarterly Monitoring Report pertaining toexternal Credit Ratingshas been prepared based on data pertaining to1,203 business entities whose credit ratings were available for both quarters.
o The external credit ratings of 36 business entities (only 3%) deteriorated in Q2 FY 2022 compared with Q1 FY 2022 in which 8% of the business entities had witnessed a deterioration in their credit ratings.
o The credit ratings of 6% of the business entities improved in Q2 FY 2022, up from 4% in the prior quarter.
o This reinforces the fact that there was a significantly lower level of risk in the Indian business environment in Q2 FY 2022 as compared with the prior quarter.
(Please see table and chart on the next page)
Change in Credit Ratings between Q1 FY 2022 and Q2 FY 2022
Type of Change Number of
Companies / firms %
Deterioration 36 3%↓
Improvement 70 6%↑
No Change 1,097 91%↔
Grand Total 1,203 100%
Quarterly Risk Transition of Credit Ratings
Q4 FY 2020 (Jan – Mar 2020) to Q2 FY 2022 (Jul – Sep 2021)
4. Extent of Risk Deterioration in Monitored Business Entities: Rubix then studied the extent of risk deterioration in the 10,973 business entities being monitored. It conducted an analysis to check how many of the 3 Risk Variables (GST Compliance, PF Compliance and External Credit Rating) had deteriorated for each of the companies. The more the Risk Variables in which there is a deterioration, the higher is the Risk associated with the business entity.
o 14% of the total business entities (1,578 firms) saw a deterioration in any one of the three Risk Variables in Q2 FY 2022; this is nearly two-thirds lower than the previous quarter in which 39% of the business entities saw a deterioration in any one risk variable.
o Only 1% of the total business entities saw a deterioration in two Risk Variables in Q2 FY 2022 compared with 4% in the prior quarter.
o Not a single business entity witnessed a deterioration in all three Risk Variables in Q2 FY 2022 compared with 14 business entities in the prior quarter.
Deterioration in Risk Variables between Q1FY 2022 and Q2 FY 2022 Number of Companies %
No Deterioration in any Risk Variable 9,331 85%
Deterioration of 1 Risk Variables 1,578 14%
Deterioration of 2 Risk Variables 64 1%
Deterioration of 3 Risk Variables 0 0%
Grand Total 10,973 100%
Kaushal Sampat, Founder of Rubix Data Sciencessaid,“The Rubix Quarterly Risk Transition Report for Q2 FY 2022indicates a huge improvement in the risk environment as compared with the previous quarter. This can be attributed to the resurgence in economic activity after the lifting of Covid restrictions imposed by the Government. Theuptick in vaccinations and normal monsoon are driving consumption which augurs well for economic growth in the remainder of the fiscal.”
About Rubix Data Sciences
Rubix Data Sciences Pvt. Ltd. helps you to take prudent credit risks, build a robust supply chain and monitor compliance for your business partners in India and around the world. Set up by highly experienced Risk Professionals who have worked extensively in the credit, legal and supply chain information domains, Rubix has been awarded the Certificate of Recognition at the IMC Digital Technology Awards 2020 in the category: Most Promising Start-Up IT Company in Enabling Digital Transformation.
The Rubix platform and its suite of reports, products and services are based on its extensive database of structured and unstructured data aggregated from over 120+ sources, customized predictive analytics and proprietary technology. Through its solutions, Rubix provides deep insights to Credit, Risk, Supply Chain and Compliance professionals in 350+ Banks, Credit Insurance Companies, Fintechs and Corporates, facilitating quicker and more effective decision-making.
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