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CREDIT RATING AGENCY (CRA)

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Credit Rating does not only cover rating of securities but also covers rating of fixed deposits, foreign exchange, country ratings and real estates. As per the SEBI (Credit Rating Agencies) Regulations, 1999, the definition of credit rating agencies and rating: 

■ RATING Rating means an opinion regarding securities expressed in the form of standard symbols or in any other standardized manner, assigned by a CRA and used by the issuer of such securities to comply with a requirement specified by these Regulations. 

■ CREDIT RATING AGENCIES:  “CRA means a body corporate engaged in or proposes to be engaged in the business of rating of securities offered by the way of public or right issue”. 

In simple term, CRA is a company that assigned credit ratings, which rate a debtor‟s ability to pay back debt by making timely interest payments and the likelihood of default. Further, it is an obligation on all the companies which are doing rating business, must register itself with SEBI before starting its business.  

In India, the following six credit rating agencies registered with SEBI which give credit ratings: 

(a) CRISIL (Credit Rating and Information Services (India) Limited): 

■ CRISIL Ltd. is India‟s first credit rating agency incorporated in 1987 which is providing ratings, research, and risk and policy advisory services. 

■ It is an India‟s leading ratings agency. 

■ It provides rating services to the entire range of debt instruments like bank loans, certificates of deposit, commercial paper, non – convertible debentures, bank hybrid capital instruments, asset – backed securities, mortgage – backed securities, perpetual bonds, and partial guarantees including the other securities. 

(b) ICRA Limited (Investment Information and Credit Rating Agency of India Limited): 

■ ICRA Ltd. was set up in 1991 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 joint – venture between Moody‟s and various Indian commercial banks and financial services companies. 

(c) CARE (Credit Analysis and Research Limited): 

■ CARE Ltd. commenced its operations in April 1993. 

■ It was established itself as the second – largest credit rating agency in India. 

■ CARE Ratings has also emerged as the leading agency for covering many rating segments like that  for banks, sub – sovereigns and IPO grading.

■ CARE‟s registered office and head office, is located at Mumbai and also having regional offices at different locations like Ahmedabad, Bangalore, Chennai, Hyderabad, Jaipur, Kolkata, New Delhi, Pune, Coimbatore. 

(d) India Ratings and Research Pvt. Ltd. (Formerly Fitch Rating India Pvt. Ltd.):

■ India Ratings and Research (Ind – Ra) is India‟s most respected credit rating agency which provides accurate & timely ratings. 

■ It changed its name in 2001 to India Ratings and Research Pvt. Ltd. 

■  Ind – Ra currently maintains coverage of corporate issuers, financial institutions, which includes banks and insurance companies, Finance & leasing companies and managed funds, Urban Local Bodies and Project Finance.

■ Ind – Ra is headquartered in Mumbai and has six branch offices located at Ahmedabad, Bengaluru, Chennai, Delhi, Hyderabad and Kolkata. 

■ Ind – Ra is recognized by the Securities and Exchange Board of India, the Reserve Bank of India and National Housing Bank. 

■ Ind – Ra is a wholly owned subsidiary of the Fitch Group.

(e) Brickwork Rating Pvt. Ltd.: 

■ Brickwork Ratings is a SEBI, RBI & NSIC registered credit rating agency offers Bank Loan, NCD, Commercial paper, MSME ratings and other grading services. 

■ It is a Bangalore – based company and had started its operation in 2008 after its registration with SEBI. 

■ It has presence in Bengaluru, New Delhi, Mumbai, Chennai, Hyderabad, Kolkata, Ahmedabad, Guwahati as well as 50 other cities in India. 

■ It is also registered with Ministry of New and Renewable Energy (MNRE) to offer green ratings. 

(f) SMERA (SME Rating Agency of India Limited): 

■ SMERA Ratings Ltd. is a joint initiative of Small Industries Development Bank of India (SIDBI), Dun & Bradstreet Information Services India Private Limited (D & B) and many leading public and private sector banks in India. 

■ SMERA started its operations in 2005 as a credit rating agency for Micro, Small and Medium Enterprises (MSME) sector in the country.

■ It is registered with SEBI and also empanelled as an approved rating agency by the National Small Industries Corporation Ltd. (NSIC) under the “Performance & Credit Rating Scheme for Small Industries”, approved by the Ministry of Small Scale Industries, Government of India. 

■ It has its Registered and Head Office in Mumbai, currently operates from 11 locations spread across the country.

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