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Market regulator Securities and Exchange Board of India wants listed Indian entities to disclose sufficient information to the market to ensure transparency in their functioning.
This would help investors to get a fair understanding of the companies, Sebi chairman, C B Bhave said while launching independent equity research by Crisil in Mumbai on Tuesday.
He said the regulator would 'focus' on those listed companies, who are not ready to share sufficient information to independent research firms.
Through the research, Crisil would provide independent assessments to investors on the fundamentals and valuations of listed Indian companies.
The grades will be available on a five-point scale and will be reviewed on a quarterly basis.
Bhave said that investors must look at equity research reports with the knowledge that who has commissioned the report.
Noting that availability of sufficient information was necessary to ensure smooth functioning of the market, Bhave said that even for the regulator, it was important to know investors' feedback.
"As we advance, with more access to information, we need to improve the methodology of working," Bhave said.
Also, the availability of research reports on small and mid cap companies will help to improve the liquidity in the market, Bhave said.
Crisil said a detailed equity research report on each graded company explaining the grades will be avilable free of cost on its website.
According to Crisil, only the top 100 of around 3,500 active listed Indian companies receive reasonable levels of equity reserach coverage.
Image: Sebi chief C B Bhave