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Credit Rating Agencies in India

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credit rating agency is a company which rates the debtors on the basis of their ability to pay back the debt in timely manner. They rate large scale borrowers, whether companies or governments.
There are three big credit rating agencies in the world which are Standard and Poor’s (S&P), Moody’s and Fitch Ratings.

There are mainly 4 credit rating agencies in India which are

Credit Rating and Information Services of India Limited (CRISIL)

  • It is India’s first credit rating agency which was incorporated and promoted by the erstwhile ICICI Ltd, along with UTI and other financial institutions in 1987.
  • After 1 year, i.e. in 1988 it commenced its operations.
  • It has its head office in Mumbai.
  • It is India’s foremost provider of ratings, data and research, analytics and solutions, with a strong track record of growth and innovation.
  • It delivers independent opinions and efficient solutions.
  • CRISIL’s businesses operate from 8 countries including USA, Argentina, Poland, UK, India, China, Hong Kong and Singapore.
  • CRISIL’s majority shareholder is Standard & Poor’s.
  • It also works with governments and policy-makers in India and other emerging markets in the infrastructure domain.

Investment Information and Credit rating agency (ICRA)

  • The second credit rating agency incorporated in India was ICRA in 1991. It was originally named as Investment Information and Credit Rating Agency and later was named as ICRA.
  • It was set up by leading financial/investment institutions, commercial banks and financial services companies as an independent and professional investment Information and Credit Rating Agency.
  • It is a public limited company.
  • It has its head office in Gurugram, Haryana.
  • ICRA’s majority shareholder is Moody’s.
  • Dhruba Narayan Ghosh is the Chairman Emeritus of ICRA Limited

Credit Analysis & Research Ltd. (CARE)

  • The next credit rating agency  set up was CARE in 1993.
  • It is the second-largest credit rating agency in India.
  • It has its head office in Mumbai.
  • CARE Ratings is one of the 5 partners of an international rating agency called ARC Ratings.

ONICRA

  • It is a private sector agency set up by Onida Finance and was established by  Sonu Mirchandani.
  • It is one of the seven agencies licensed by the National Small Industries Corporation (NSIC) for the rating of SMEs. Onicra provides grading services as well. Its grading services include education grading, healthcare grading, solar energy grading and APMC grading.
  • It has its head office in Gururgam, Haryana.
  • It provides ratings, risk assessment and analytical solutions to Individuals, MSMEs and Corporates.
  • It is one of only 7 agencies licensed by NSIC (National Small Industries Corporation) to rate SMEs.
  • They have Pan India Presence with offices over 125 locations.

Apart from these credit rating agencies, there are three more credit rating agencies which are also registered with SEBI. These are Fitch Ratings India Private Ltd., Brickwork Ratings India Private Limited, SME Rating Agency of India Ltd. (SMERA).

Ind-Ra:

India Ratings and Research (Ind-Ra) is a credit rating agency that provides time-bound, accurate and prompt credit opinions. It is 100% owned subsidiary of the Fitch Group. Ind-Ra covers corporate issuers, financial institutions, banks, insurance companies, urban local bodies, structured finance and project finance. Fitch‘s Ind-Ra is headquartered in Mumbai. Ind-Ra is recognised by Securities and Exchange Board of India, National Housing Bank and the Reserve Bank of India. 

  • FITCH: Fitch is a major financial information service provider and rating agency having its operations in more than 30 countries across the globe. It checks credit capacity of global leaders in all industries
  • Recently in June 2020, Fitch Ratings revised its rating outlook for India downward from stable to negative. 

SMERA: 

This agency was founded in 2005 by Small Industries Development Bank of India (SIDBI), Dun and Bradstreet Information Services India Private Limited (D&B) and various public, private sector and other MNC banks of India.  It is an external credit assessment institution (ECAI) and was accredited by RBI in 2012. SMERA rates bank loans under Base II guidelines.The headquarters of SMERA is in Mumbai, Maharashtra. 

  • SMERA is now a wholly owned subsidiary of Acuité Ratings & Research Limited.
  •  It is widely known as “The SME Rating Agency”.
  • SMERA became the world’s 1st MSME(Micro, Small and Medium Enterprises) focused rating agency and introduced the concept of SME Ratings in India. 

Brickwork Ratings (BWR):

Brickwork Rating was established in 2007 and is promoted by Canara Bank. Brickwork Ratings is recognised as external credit assessment agency (ECAI) by Reserve Bank of India (RBI) to carry out credit ratings in India.