Credit ratings represent how reliable an individual or company is in repaying loans. In India, the credit rating industry is dominated by agencies like CRISIL, ICRA, Fitch, CARE, ONICRA, and SMERA. A few years ago, the Economic Survey raised concerns about the methodologies used by these agencies. This article provides an overview of some of the key credit rating agencies in India.
What is a Credit Rating?
A credit rating assesses the ability of a borrower—whether an individual, business, or government—to repay their debts. It evaluates both the willingness and capacity of the borrower to meet debt obligations. Credit ratings are not simply calculated using numbers; they involve both qualitative and quantitative assessments.
What are Credit Rating Agencies?
Credit rating agencies (CRAs) assess a borrower’s ability to repay loans and the likelihood of defaulting. CRAs offer independent, research-based opinions on the creditworthiness of a borrower. In India, credit rating agencies are regulated by SEBI under the SEBI (Credit Rating Agencies) Regulations, 1999.
SEBI’s Regulations for Credit Rating Agencies
The Securities and Exchange Board of India (SEBI) has tightened the rules for credit rating agencies to ensure transparency. Some of the key directives include:
- Rating agencies must disclose the liquidity position of companies they rate.
- If ratings are based on expected cash inflow, the source of the funds must be identified.
- Agencies must publish their rating history and how ratings have changed over time.
- CRAs must assess a company’s liquidity deterioration and any mismatch in assets and liabilities.
Credit Rating Agencies in India
1. CRISIL (Credit Rating Information Services of India Ltd.)
CRISIL is the largest credit rating agency in India, holding over 60% of the market share. It offers ratings in financial, manufacturing, and SME sectors. Based in Mumbai, CRISIL’s majority stake is held by Standard & Poor’s, a global rating agency.
The rating generated by the agency ranges from AAA to D, wherein AAA is the highest or creditworthy and D is the lowest or even defaulted.
Registered Address:
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, crisilratingdesk@crisil.com
2. CARE (Credit Analysis and Research Ltd.)
Established in 1993, CARE Ratings is the second-largest credit rating agency in India. It is supported by major financial institutions like Canara Bank and IDBI. Headquartered in Mumbai, CARE provides ratings for a variety of sectors.
Its credit ratings can be used by investors to make informed decisions based on credit risk and risk-return expectations. CareEdge Ratings’ (CARE Ratings Ltd.) manages and operates its wholly owned subsidiaries, such as CARE Advisory, Research & Training Ltd. and CARE Risk Solutions Pvt Ltd.
Registered Address:
4th Floor, Godrej Coliseum
Somaiya Hospital Road, Behind Everard Nagar
Off Eastern Express Highway, Sion (E), Mumbai 400 022
Email: care@careratings.com
3. Acuite Ratings & Research Ltd.
Acuité Ratings & Research Limited (Formerly known as SMERA Ratings Limited) is a SEBI-registered and RBI-accredited credit rating agency that offers ratings to companies serving structured finance, corporate and financial sectors. Its earlier range of products and services portfolio included Bank Loan Ratings, SME Ratings, Bond Ratings, CP Ratings, etc.
The agency offers credit rating services to companies serving various sectors, such as banking, telecom, IT & ITes, steel, aviation, oil and gas, retail, etc.
Registered Address:
708, Lodha Supremus
Lodha iThink Techno Campus
Kanjurmarg (East)
Mumbai 400 042
Email: info@acuite.in
4. Brickwork Ratings India Private Ltd.
Brickwork Ratings (BWR) is a credit rating agency registered with SEBI and accredited by the RBI. It provides ratings for various financial instruments such as bank loans, fixed deposits, non-convertible debentures (NCDs), commercial paper, securitized paper, and security receipts.
BWR offers credit rating services to banks, financial institutions, large corporations, and state and local governments. Their services cover a wide range of capital market instruments and bank loans, catering to sectors like corporate, financial, infrastructure, insurance, public sector units (PSUs), state governments, municipalities, and urban local bodies.
Registered Address:
3rd Floor, Raj Alkaa Park,
29/3 & 32/2 Kalena Agrahara,
Bannerghatta Road, Bengaluru – 560 076
Phone : +91 80 4040 9940 / 9999 | Mobile: +91 96118 05999
5. India Ratings and Research Pvt. Ltd.
India Ratings and Research (Ind-Ra), a fully owned subsidiary of the Fitch Group, is one of the top credit rating agencies in India, recognized by SEBI and approved by the RBI. Ind-Ra provides credit rating services to banks, insurance companies, corporations, finance and leasing firms, urban local bodies, and companies involved in project and structured finance.
Headquartered in Mumbai, Ind-Ra also has seven branch offices across India, located in Delhi, Chennai, Kolkata, Ahmedabad, Bengaluru, Hyderabad, and Pune.
Registered Address:
Wockhardt Towers, 4th Floor, West Wing
Bandra Kurla Complex, Bandra East
Mumbai 400 051
Tel: + 91 (022) 40001700
Fax: + 91 (022) 40001701
Email: infogrp@indiaratings.co.in
6. ICRA
Established in 1991, ICRA is backed by prominent Indian banks and financial institutions. It focuses on providing credit ratings for the MSME sector. Moody’s, a global credit rating agency, holds a significant stake in ICRA.
The agency uses a transparent rating system to assign comprehensive credit ratings to corporates. It specialises in assigning corporate governance ratings, mutual funds ratings, structured finance ratings, performance ratings, etc.
Registered Address:
B-710, statesman House,
148, Barakhamba Road,
New Delhi, 110001
Telephone No: +91-11-23357940
7. INFOMERICS Valuation and Rating Private Ltd.
INFOMERICS Valuation and Rating Private Limited is a credit rating agency registered with SEBI and accredited by the RBI. It specializes in providing detailed analysis and credit ratings for banks, NBFCs, large corporations, and small and medium-sized enterprises (SMEs).
INFOMERICS offers ratings for money market and capital market instruments, as well as various borrowing programs, including non-convertible debentures (NCDs), commercial papers, Tier I & Tier II bonds, perpetual bonds, structured obligations (such as guarantee-backed debt), and securitization transactions.
Additionally, the agency rates mutual funds and alternative investment fund schemes. Its grading services extend to corporate governance ratings, and evaluations of construction companies, engineering and management institutions, initial public offerings (IPOs), and more.
Registered Address:
Flat No. 104/106/108 and 303, First Floor & 3rd 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
Frequently Asked Questions About Credit Rating Agencies in India
Q1: How many credit rating agencies are there in India?
There are seven major credit rating agencies in India, including CRISIL, CARE, ICRA, SMERA, Brickwork Ratings, India Ratings, and Infomerics Valuation and Rating Pvt. Ltd.
Q2: What is a credit rating?
A credit rating is a measure of the creditworthiness of an individual or business. It serves as a key factor in determining whether someone is eligible for a loan and influences the terms of the loan.
Q3: What is the Difference Between Credit Rating and Credit Score?
Credit rating and credit score both assess creditworthiness but in different contexts and for different entities.
- Credit Rating: This evaluates the creditworthiness of organizations, including governments and corporations. Credit Rating Agencies (CRAs) like CRISIL, ICRA, and CARE assign these ratings, which are typically expressed as letter grades (e.g., AAA, BBB). These ratings provide an overview of an entity’s ability to meet its financial obligations.
- Credit Score: This is used to determine the creditworthiness of individuals based on their credit history. Calculated by credit bureaus such as TransUnion CIBIL, Equifax, Experian, and CRIF High Mark, a credit score is a three-digit number ranging from 300 to 900. Generally, a score closer to 900 is considered excellent by lenders and indicates strong creditworthiness.
Q4: What is the difference between CRISIL ‘AAA’ and ‘AA’?
CRISIL ‘AAA’ represents the highest level of credit safety, indicating the strongest capacity to meet financial obligations. It is the top rating assigned by credit rating agencies. On the other hand, ‘AA’ is the second-highest rating, signifying very strong creditworthiness but slightly lower than ‘AAA’.
Read: What is a Credit Card and How It Works?
