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List of credit rating agencies in India

Have you ever wondered about credit rating agencies and what those credit ratings mean? We'll decode credit ratings and look at the agencies in India

Published: Mar 26, 2024 06:30:18 PM IST
Updated: Mar 26, 2024 06:34:57 PM IST

List of credit rating agencies in India

How do lenders decide who's trustworthy enough to lend money to? That's where credit rating agencies come in. They rate the creditworthiness of individuals, companies, and even whole countries.

However, their impact goes way beyond lending decisions. We'll explore what they do, how they do it, and why it matters to you as a borrower, investor, or just someone curious about the world of finance.

Also Read: Top 10 banks in India by market cap in 2024

What are credit ratings?

  • Credit ratings and the agencies behind them give us the lowdown on how likely someone or something is to pay back the money they've borrowed.
  • Whether it's an individual, a big company, or even a government, these ratings dive deep into their financial health, payment track record, and the economic landscape.
  • This helps lenders and investors decide whether to lend them cash or invest in their debt. Credit ratings keep the financial market fair and transparent by helping everyone understand the risks involved.
  • You'll likely get better loan deals if you have a good rating. But if your rating is not so good, expect to pay a bit more in interest.
  • Credit ratings are assessments of how likely individuals or companies are to repay the borrowed money. Think of it as a financial report card that lenders use to evaluate the creditworthiness of borrowers.
  • These ratings are assigned by specialised agencies like CRISIL (Credit Rating Information Services of India Limited), ICRA (Investment Information and Credit Rating Agency), CARE (Credit Analysis & Research Ltd), ONICRA (Onida Individual Credit Rating Agency), and SMERA (Small and Medium Enterprises Rating Agency of India) in India, based on various factors such as financial health, payment history, and economic conditions.
  • A higher credit rating implies a lower risk of default, making it easier for borrowers to access loans on favourable terms.
  • Conversely, a lower credit rating suggests a higher risk, which may result in difficulty in securing loans.
  • Overall, credit ratings play a crucial role in the functioning of financial markets by providing transparency and confidence to lenders and investors.

What are credit rating agencies?

Credit rating agencies are organisations that assess the creditworthiness of individuals, companies, governments, or other entities that borrow money. These agencies evaluate the likelihood of borrowers repaying their debts based on various financial and non-financial factors.

They assign credit ratings to borrowers, ranging from AAA (highest credit quality) to D (default). The ratings guide lenders and investors about the risk associated with lending money to a particular borrower.

Credit rating agencies in India

Let’s look at some Indian credit rating agencies and learn a little about them.

Acuité Ratings & Research Limited

Founded in: 1995
Headquarters: Mumbai

Acuité Ratings & Research Limited is a comprehensive credit rating agency authorised by the Securities and Exchange Board of India (SEBI) and recognised by the Reserve Bank of India (RBI) as an External Credit Assessment Institution (ECAI) for Bank Loan Ratings compliant with BASEL-II regulations.

Acuité is headquartered in Mumbai, and its branches operate in six other cities.

Brickwork Ratings India Private Limited

  • Founded in: 2008
  • Headquarters: Bengaluru
Brickwork Ratings is powered by the analytical expertise of seasoned credit analysts, bankers, and industry regulators.

Established in 2007, Brickwork Ratings offers dependable credit ratings across various sectors, including structured finance, public finance, financial guarantee, financial institutions, project finance, and corporate sectors.

Brickwork Ratings is registered with the SEBI as a credit rating agency and recognised by the RBI as an ECAI authorised to conduct credit ratings in India.

Care Ratings Limited

  • Founded in: 1993
  • Headquarters: Mumbai
Established in 1993, Credit Analysis & Research Ltd (CARE) offers diverse credit ratings to help corporations raise capital and assists investors in making informed decisions based on credit risk as well as their own expectations.

Initially promoted by major Indian banks and financial institutions, CARE Ratings evaluates various debt instruments, including structured obligations, commercial paper, debentures, fixed deposits, and bonds across industrial, service, infrastructure, banking, and financial sectors.

Crisil Ratings Limited

  • Founded in: 1987
  • Headquarters: Mumbai
Crisil Ratings Limited, a subsidiary of CRISIL Limited, is one of the foremost Indian credit rating agencies. With a reputation for excellence and credibility, Crisil Ratings provides expert assessments of credit risks, empowering stakeholders with valuable insights to navigate complex financial landscapes.

ICRA Limited

  • Founded in: 1991
  • Headquarters: Gurgaon
ICRA Limited, previously known as the Investment Information and Credit Rating Agency of India Limited, is a leading credit rating agency in India that offers reliable credit assessments and ratings to various entities in India.

ICRA's credit ratings are assigned nationally for Indian Rupee-denominated debt and reflect relative credit risks within India. They do not facilitate cross-country comparisons but provide rankings of credit risk within India.

In addition to credit ratings, ICRA assigns Corporate Governance Ratings and provides Performance Ratings, Gradings, and Rankings for mutual funds, construction companies, and hospitals.

India Ratings and Research Pvt. Ltd.

  • Founded in: 1995
  • Headquarters: Mumbai
India Ratings and Research Pvt. Ltd., previously known as Fitch Ratings India Pvt. Ltd., is a respected credit rating agency in India. Leveraging global expertise and local insights, India Ratings and Research provides comprehensive credit assessments to support stakeholders in managing risks and seizing opportunities in the Indian market.

Infomerics Valuation and Rating Pvt. Ltd

  • Founded in: 1986
  • Headquarters: Delhi
Infomerics Valuation and Rating Pvt. Ltd. is a dynamic credit rating agency in India that specialises in providing valuation and rating services to diverse entities.

Frequently Asked Questions (FAQs)

Does RBI approve CRISIL?

The RBI acknowledges CRISIL Ratings as an external credit assessment institution for evaluating bank loan ratings. Banks rely on CRISIL Ratings to assess the credit risk associated with their loan exposures and assign appropriate risk weights accordingly.

Who controls credit rating agencies in India?

The SEBI regulates credit rating agencies in India.

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