List of Top Credit Rating Agencies in India
Credit Rating Agencies in India in this section we would understand What is credit rating versus? What is credit score and credit rating the various agencies involved in India?
What is Credit Rating?
A credit rating is an evaluation of credit risk, predicting the debtor’s ability to repay the debt. Just like individuals have a credit score whether you use a credit card or have a loan in your name companies also have a similar system called a credit rating. This credit rating tells you how creditworthy a company is, meaning how capable it is of repaying its loans on time.
What is Credit score?
A credit score is a number typically between 300 and 850 that represents your record with money and allows financial institutions to quickly evaluate the risk associated with lending to you. All credit scores are based on the information in your major credit reports. A score above 720 is considered excellent, while most lenders regard a rating below 620 to be bad. Much like working out, our credit scores require constant maintenance. We need to feed them positive information from loans.
Credit Rating Agencies in India
CRISIL(Credit Rating Information Services of India Ltd)
Set up in 1987,it is first CRA to find it’s place in India .Headquartered in Mumbai. CRISIL rates organizations like public limited companies, bank and financial organizations and not individuals .
It also provides advisory services and training services. Helps individual and institutional investors in making informed investment decisions, Creates awareness about credit rating amongst merchant brokers, corporations, brokers, regulatory authorities and others.
CARE(Credit Analysis and Research Ltd)
CARE was established in 1993 and was initially promoted by Unit Trust of India (UTI), Industrial Development Bank of India (IDBI), Canara Bank, and several other financial institutions. Headquartered in Mumbai.
CARE is the second largest credit rating agency in India. By providing the entire spectrum of credit rating , care helps the corporates to raise capital for their various requirements. It also assists the investors in formulating an informed investment decision based on the credit risk and their own risk return expectations. Also to conduct sector based studies and provide necessary advisories for valuation ,credit appraisal systems and financial restructuring.
3.ICRA (Investment Information and Credit Rating Agency of India)
ICRA is a joint venture of Indian financial and banking service Organizations and Moody’s, which was set up back in 1991.In April of2007,the credit rating agency was renamed to ICRA limited and also got listed in the Bombay stock exchange and national stock exchange. Headquartered in Gurugram ,Haryana.
ICRA stand as an independent professional corporate investment information and credit rating and advisory agency. ICRA provide informative consultation to institutional and individual investors , regarding risk. It intends to operate in a transparent manner and develop user friendly concepts.
4.India Ratings & Research Pvt Ltd.
India Ratings and Research – A fitch group company. Headquartered in Mumbai.
Ind-Ra currently maintains coverage of corporate issuers, financial institutions(including banks and insurance companies),finance and leasing companies ,managed funds, urban local bodies and structured finance and project finance companies. Ind-Ra rates securities of companies in numerous industries including chemicals ,steel, Petroleum automobiles, consumer goods ,healthcare, telecom, power etc.
Major functions of Credit Rating Agencies in India
- To rate companies, state governments, local government bodies, non-profit organizations, countries, securities, and special-purpose entities
- To assess the adequacy of cash flow
- To help in public policy formation
- To provide a solid basis for evaluating risk and return
- To facilitate the protection of earnings
Conclusion
CRISIL is by far the largest credit rating agency in India followed by CARE Ratings which India’s second largest credit rating agency. All these Credit Rating Agencies India are SEBI registered and RBI accredited Credit Rating Agencies. Most of these Rating Agencies are full service rating agency. They provides Rating services for debt instruments like NCDs, Bonds, Commercial Papers etc.
Some of these agencies also providers rating services for small and medium enterprises (SMEs).