Credit Rating Agencies in India

Credit Rating Agencies (CRA) assess creditworthiness of organisation and different entities. In simple words,
these agencies analyse a debtor’s ability to repay the debt and also rate their credit risk. All the credit rating
agencies in India are regulated by SEBI (Credit Rating Agencies) Regulations, 1999 of the Securities and
Exchange Board of India Act, 1992. There are a total of seven credit agencies in India viz, CRISIL, CARE,
ICRA, SMREA, Brickwork Rating, India Rating and Research Pvt. Ltd and Infomerics Valuation and Rating
Private Limited.
How Credit Rating Agencies Work
Credit rating agencies assign ratings to an organization or an entity. The entities that are rated by credit rating
agencies comprise companies, state governments, non-profit organisations, countries, securities, special purpose
entities, and local governmental bodies. Credit rating agencies take into consideration several factors like the
financial statements, level and type of debt, lending and borrowing history, ability to repay the debt, and the
past debts of the entity before rating their credit. Once a credit rating agency rates the entities, it provides
additional inputs to the investor following which the investor analyses and takes a sound investment decision.
Poor credit rating indicates that the entity is at a high risk of defaulting. The credit ratings that are given to the
entities serve as a benchmark for financial market regulations. Credit ratings are published by agencies like
Moody’s Investors Service and Standard and Poor’s (S&P) based on detailed analysis.
Some of the Top Credit Rating Agencies in India are:
1.Credit Rating Information Services of India Limited (CRISIL)
CRISIL is one of the oldest credit rating agencies in India. It was launched in the country in 1987 following
which the company went public in 1993. Headquartered in Mumbai, CRISIL ventured into infrastructure rating
in 2016 and completed 30 years in 2017. CRISIL acquired 8.9% stake in CARE credit rating agency in 2017. It
launched India's first index to benchmark performance of investments of foreign portfolio investors (FPI) in the
fixed-income market, in the rupee as well as dollar version in 2018. The company’s portfolio includes, mutual

funds ranking, Unit Linked Insurance Plans (ULIP) rankings, CRISIL coalition index and so on.
2.ICRA Limited
ICRA Limited is a public limited company that was set up in 1991 in Gurugram. The company was formerly
known as Investment Information and Credit Rating Agency of India Limited. Before going public in April
2007, ICRA was a joint venture between Moody’s and several Indian financial and banking service
organisations. The ICRA Group currently has four subsidiaries - Consulting and Analytics, Data Services and
KPO, ICRA Lanka and ICRA Nepal. At present, Moody’s Investors Service, the international Credit Rating
Agency, is ICRA’s largest shareholder. ICRA’s product portfolio includes rating for - corporate debt, financial
rating, structured finance, infrastructure, insurance, mutual funds, project and public finance, SME, market
linked debentures and so on.
3.Credit Analysis and Research limited (CARE)
Launched in 1993, CARE offers credit rating services to areas such as corporate governance, debt ratings,
financial sector, bank loan ratings, issuer ratings, recovery ratings, and infrastructure ratings. Headquartered in
Mumbai, CARE offers two different categories of bank loan ratings, long-term and short-term debt instruments.
The company also offers ratings for Initial Public Offerings (IPOs), real estate, renewable energy service
companies (RESCO), financial assessment of shipyards, Energy service companies (ESCO) grades various
courses of educational institutions. CARE Ratings has also ventured into valuation services and offers valuation
of equity, debt instruments, and market linked debentures. Moreover, the company has launched a new
international credit rating agency ‘ARC Ratings’ by teaming up with four partners from South Africa Brazil,
Portugal, and Malaysia. ARC Ratings has commenced operations and completed sovereign ratings of countries,
including India.
4.Brickwork Ratings (BWR)
Brickwork Rating was established in 2007 and is promoted by Canara Bank. It offers ratings for bank loans,
SMEs, corporate governance rating, municipal corporation, capital market instrument, and financial institutions.
It also grades NGOs, tourism, IPOs, real estate investments, hospitals, IREDA, educational institutions, MFI,
and MNRE. Brickwork Ratings is recognised as external credit assessment agency (ECAI) by Reserve Bank of

India (RBI) to carry out credit ratings in India.

5.India Rating and Research Pvt. Ltd.
India Ratings is a wholly-owned subsidiary of the Fitch Group. It offers credit ratings for insurance companies,
banks, corporate issuers, project finance, financial institutions, finance and leasing companies, managed funds,
and urban local bodies. In addition to SEBI, the company is recognised by the Reserve Bank of India and
National Housing Bank.
6.Acuite Ratings & Research Limited
Acuité Ratings & Research Limited is a full-service Credit Rating Agency registered with the Securities and
Exchange Board of India (SEBI). The company received RBI Accreditation as an External Credit Assessment
Institution (ECAI), for Bank Loan Ratings under BASEL-II norms in the year 2012. Since then, it has assigned
more than 8,300 credit ratings to various securities, debt instruments and bank facilities of entities spread across
the country and section of industries. It has its Registered and Head Office in BKC, Mumbai.
7.Infomerics Valuation and Rating Private Limited
An RBI-accredited and SEBI-registered credit agency, Infomerics Valuation and Rating Private Limited saw its
inception by eminent finance professionals and is now run under the leadership of Mr. Vipin Mallik. The credit
bureau strives to offer an unbiased and detailed analysis and evaluation of credit worthiness to NBFCs, banks,
corporates and small and medium scale units. It is through their rating and grading system that they determine
the credit worthiness of an organisation. Infomerics helps in reducing any kind of information asymmetry
amongst investors and lenders. Keeping transparency as it is core value, the credit bureau makes sure to deliver
comprehensive and accurate reports and records of all their clients.
Different credit rating scales
An individual's creditworthiness is represented by their credit score. Similarly, a company’s creditworthiness is
represented by the credit rating symbols assigned to them by the agencies. Credit rating agencies rate Non
convertible debentures (NCD), company deposits, and fixed deposits, among others. Let’s take a look at some
of the credit rating symbols offered by rating agencies for long-term and mid-term debt instruments.

India Ratings & Brick Work

Rating Scale CRISIL CARE ICRA
Research Ratings

Highest safety: Lowest risk of turning into a CRISIL CARE ICRA

IND AAA BWR AAA
defaulter AAA AAA AAA

CRISIL CARE ICRA

High safety: Very low credit risk IND AA BWR AA
AA AA AA

CRISIL CARE
Low risk IND A BWR A ICRA A
A A

CRISIL CARE ICRA

Moderate safety: moderate credit risk IND BBB BWR BBB
BBB BBB BBB

CRISIL CARE ICRA

Moderate risk: moderate risk of default IND BB BWR BB
BB BB BB

CRISIL CARE
High risk: high risk of default IND B BWR B ICRA B
B B

CRISIL CARE
Very high risk: Very high risk of default IND C BWR C ICRA C
C C

Default: Instruments are already in default or CRISIL CARE

IND D BWR D ICRA D
on the verge of default D D