If you want to know how many credit rating agencies are there in India and who regulates credit rating agencies in India, this article is for you.
It is common to confuse the functions of credit rating agencies and credit bureaus, as both rate creditworthiness. However, the major difference is that credit rating agencies focus on analyzing big companies and organizations, NGOs, and state or local governments. Whereas, credit bureaus report the creditworthiness of individuals.
Apart from this, credit rating agencies rate from ‘AAA’ to ‘D’ while credit bureaus report credit scores that range from 300 to 900.
Credit Rating Agencies assess, calculate, and report the creditworthiness of companies, enterprises, or organizations. It helps lenders and investors speculate the risk involved with investing or lending money to the entity.
They report creditworthiness in letters varying from ‘AAA’ to ‘D’, where the first is better than the latter.
This section will talk about how many credit rating agencies are there in India. Here are the top 5 credit rating agencies functional in India -
Credit Rating Information Services of India Limited or CRISIL, an S&P Global company was started in 1987. It commenced its operations in January, 1988 making it one of the oldest credit rating agencies in India.
It covers automobile, industrial, financial, IT, media, travel, health, and retail sectors among others. CRISIL is headquartered in Mumbai, India but also operates in the USA, UK, Hong Kong, China, Argentina, and Poland.
CRISIL Limited, CRISIL House, Central Avenue,
Hiranandani Business Park, Powai
Mumbai – 400076
Tel: + 91 (22) 33423000
Fax: + 91 (22) 33423810
Email: info@crisil.com
Customer Care: +1800 267 1301
Customer Support Mail : crisilratingdesk@crisil.com
ICRA Limited, formerly known as Investment Information and Credit Rating Agency of India Limited, was set up in 1991. Its headquarters are situated in New Delhi, and the international credit agency Moody's Investors Service holds the largest share in ICRA Limited.
It offers information and guides institutions as well as individual investors and creditors. It also assigns ratings related to performance, mutual funds, corporate governance, etc.
ICRA’s Head Office:
Building No. 8, 2nd Floor, Tower A, DLF Cyber City, Phase II, Gurgaon - 122 002
Phone: +91-124-4545300
Telephone No: +91-11-23357940
Credit Analysis and Research Limited (CARE) is a credit rating agency which has been operating in India since 1993. Headquartered in Mumbai, India, it provides ratings for manufacturing, infrastructure, and financial sectors. It also provides recovery ratings, independent credit evaluation of residual debt, public finance ratings, etc.
CARE Limited is a partner in ARC Ratings, an international credit rating agency, and has presence and subsidiaries in Nepal, Japan, Africa, and Russia.
4th Floor, Godrej Coliseum, Somaiya Hospital Road, Off Eastern Express Highway, Sion (East), Mumbai - 400 022
Phone: +91-22-6754 3404 / +91-022-6754 3456
Email: Saikat.Roy@careedge.in
Email: care@careratings.com
India Ratings and Research Private Limited is a 100% owned subsidiary of the Fitch Group, recognized by both SEBI, and the Reserve Bank of India. Its headquarters are in Mumbai but it has offices in many cities all over India.
This agency provides timely credit opinions of financial institutions, both banking and insurance, as well as leasing companies and other corporations. It also covers urban local bodies, managed funds, structures finance, and project finance companies.
Wockhardt Towers, 4th Floor, West Wing, Bandra Kurla Complex, Bandra East,
Mumbai 400051
Tel: + 91 (022) 40001700
Fax: + 91 (022) 40001701
Email: infogrp@indiaratings.co.in
Infomerics is short for Integrated Financial Omnibus Metrics Research of International Corporate Systems, which is SEBI registered and accredited by the Reserve Bank of India. It is headquartered in Delhi, but has offices all over India.
It evaluates and rates the creditworthiness of banks, NBFCs, small and medium scale units, as well as large corporations. Apart from this, they also provide ratings for construction entities, engineering and management institutions, and Initial Public Offerings or IPOs.
Flat No. 104/108, First Floor Golf Apartments, Sujan Singh Park, Maharishi Ramanna Marg, New Delhi - 110003, India
Phone: +91-11-41743541/ 41410244 / 24611910/ 24654796
Email: vma@infomerics.com , hrd@infomerics.com , info@infomerics.com
Brickwork Ratings (BWR) is a SEBI-registered and RBI accredited Credit Rating Agency. Canara Bank is their strategic partner and promoter.
They offer rating services on bank loans, fixed deposits, non-convertible debentures (NCD), commercial paper, securitised paper, security receipts, etc. They also rate large corporate customers, banks, financial institutions, state and local governments.
They have offices in Bengaluru, Mumbai, Ahmedabad, Chandigarh, Chennai, Hyderabad, Kolkata, and New Delhi in India.
3rd Floor, Raj Alkaa Park, 29/3 & 32/2 Kalena Agrahara, Bannerghatta Road,
Bengaluru - 560076
Phone: +91 80 4040 9940 / 4040 9999
Mobile: +91 96118 05999
Acuité Ratings & Research Ltd. is a SEBI registered and RBI accredited credit rating agency. co-promoted by Dun & Bradstreet, a global data & analytics company.
They rate a range of debt instruments including NCDs, Commercial Paper and Bank Loan Ratings. The agency offers credit rating services to companies serving various sectors, such as banking, telecom, IT & ITes, steel, aviation, oil and gas, retail, etc.
They have also set up a Centre of Excellence responsible for developing ratings criteria, strengthening internal processes, improving ratings quality, and ensuring compliance with the existing regulations.
708, Lodha Supremus, Lodha iThink Techno Campus, Kanjurmarg (East),
Mumbai - 400042
Phone: +91 99698 98000
Email: info@acuite.in
Credit bureaus and credit rating agencies have different way of reporting creditworthiness. Credit bureaus use numbers ranging from 300 to 900, where a higher score is considered better.
However, credit rating agencies rate creditworthiness ranging from AAA to D. They following table describes what each of these mean -
| Credit Rating | Interpretation |
|---|---|
|
AAA |
Highest safety and lowest credit risk |
|
AA |
High safety and low credit risk |
|
A |
Adequate safety and low credit risk |
|
BBB |
Moderate safety and moderate credit risk |
|
BB |
Moderate risk of default |
|
B |
High risk of default |
|
C |
Very high risk of default |
|
D |
Already defaulted or expected to default |
There are many types of credit ratings depending on how you classify them. Let’s look at the types of credit rating one by one -
According to the term, credit rating can be either short term credit rating or long term credit rating.
The first determines the probability of a borrower to default within one year. Long-term ratings indicate the probability of a borrower defaulting in the extended future. Generally, credit ratings are for medium to long term.
In this category, there are two major types of credit ratings - investment and speculative grade.
The first category proves that the corporation has good financial management and is at a lower risk. It shows that the borrower is most likely to pay off their financial obligations on time.
The speculative grade implies that a high level of risk is associated with the borrower. Entities that have this rating may find it difficult to get loans or may have to pay a higher rate of interest to get one.
Credit rating agencies play a major role for both companies and investors. In case you want to invest in a company, you would like to check the company’s financial conditions so you can be sure you won’t lose money.
Apart from this basic function, here are some roles of credit rating agencies in India -
Credit rating agencies play a major role by providing information to lenders and investors if their investment would be worthwhile.
There are quite a few credit rating agencies in India but the top 7 are mentioned in this article.
There are many credit rating agencies in India of which 7 are most popular, namely, CRISIL Limited, ICRA Limited, CARE Ratings Limited, India Ratings and Research Pvt. Ltd., Infomerics Ratings Pvt. Ltd, Brickwork Ratings India Pvt. Ltd., and Acuité Ratings & Research Ltd.
Credit rating agencies in India are regulated by SEBI or the Securities and Exchange Board of India.
CRISIL Limited is the first credit rating agency of India and it started its operations in 1988.
No, SEBI is not a credit rating agency. SEBI stands for Securities and Exchange Board of India, which is the body that governs all credit rating agencies in the country.
A credit score is of 3 digits and signifies the creditworthiness of an individual. But a credit rating is a rank denoted by letters or a single digit, which shows the creditworthiness of a corporation, company, or enterprise.
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