1. What does credit rating mean?
Credit rating is the analysis of the possible credit risks associated with granting a financial instrument to an individual or a company. The rating is provided based on the creditworthiness and the credentials of an individual or a company. The creditworthiness of an individual or a company is decided based on the lending and borrowing transactions done in the past. Credit rating is determined after weighing the statements of liabilities and assets, and their ability to meet the debt obligations.
2. What is a credit rating agency?
A credit rating agency (CRA) evaluates and assesses an individual’s or a company’s creditworthiness. That is, these agencies consider a debtor’s income and credit lines to analyse the debtor’s ability to repay the debt or if there is any credit risk associated.
Securities and Exchange Board of India (SEBI) reserves the right to authorise and regulate credit rating agencies according to SEBI Regulations, 1999 of the SEBI Act, 1992.
3. How do credit rating agencies work?
Credit rating agencies analyse an organisation, individual, or entity and assign ratings to it. These agencies have the authority to rate companies, state governments, non-profit organisations, countries, securities, local government bodies, and special purpose entities.
Many factors are considered while settling with a rating such as financial statements, type of debt, lending and borrowing history, repayment capability, past credit repayment behaviour, and more. Each of these factors contributes to a specified share in computing the end result, credit score.
The credit rating agency does not provide any decision to financial institutions on whether an entity should get credit facility or not; rather it provides the report and additional inputs making it easier for the lender to analyse and an informed decision.
4. List of registered credit rating agencies
According to SEBI, the following credit rating agencies are registered and authorised to compute and share credit score/report with the financial institutions and applicants.
Credit Rating Information Services of India Limited (CRISIL), one of the oldest credit rating agencies, was set up in 1987. The agency stepped on to infrastructure rating in 2016. CRISIL has been operational in countries such as USA, UK, Poland, Hong Kong, China, and Argentina in addition to India.
The registered address and contact details of CRISIL are:
Hiranandani Business Park
Mumbai 400 076
Tel: + 91 (22) 33423000
Fax: + 91 (22) 33423810
India Ratings and Research Pvt Ltd:
India Ratings and Research, a wholly-owned subsidiary of Fitch Group, provides accurate and timely credit opinions on the country’s credit market. The firm covers corporate issuers, financial institutions, managed funds, urban local bodies, project finance companies, and structured finance companies. The headquarters is in Mumbai and the other branch offices are in Ahmedabad, Delhi, Chennai, Bengaluru, Hyderabad, Pune, and Kolkata.
The registered address and contact details with SEBI are:
Wockhardt Towers, 4th Floor, West Wing
Bandra Kurla Complex, Bandra East
Mumbai 400 051
Tel: + 91 (022) 40001700
Fax: + 91 (022) 40001701
The Investment Information and Credit Rating Agency (ICRA), a joint venture of Moody’s and Indian Financial and Banking Service Organisation was established in 1991. The organisation is known for assigning corporate governance rating, performance rating, mutual funds ranking, and more.
The registered address and contact details of ICRA are given below:
1105, Kailash Building, 11th Floor 26,
Kasturba Gandhi Marg
New Delhi 110 001
Tel: + 91 (11) 23357940 – 50
Fax: + 91 (11) 23357014
Credit Analysis and Research Limited (CARE) is a credit rating agency that is operational from April 1993. The agency provides credit rating that helps corporates to raise funds for their investment requirements. Investors can make decisions based on credit risk and risk-return expectations. In addition to the head office in Mumbai, the firm has regional offices in New Delhi, Pune, Kolkata, Chandigarh, Jaipur, Ahmedabad, Bengaluru, Chennai, Coimbatore, and Hyderabad.
The address of CARE’s registered office is given below:
4th Floor, Godrej Coliseum
Somaiya Hospital Road
Behind Everard Nagar
Off Eastern Express Highway, Sion (E)
Mumbai 400 022
Tel: + 91 (22) 566 02871/ 72/73
Fax: + 91 (22) 566 02876
Brickwork Ratings India Pvt Ltd:
In addition to registering with SEBI, Brickwork Ratings (BWR) is accredited by RBI and empanelled by NSIC, NCD, MSME ratings and grading services. It has received accreditation from NABARD for MFI and NGO grading. Brickwork is also authorised to grade companies seeking credit facilities from IREDA, Renewable Energy Service Providing Companies (RESCOs) and System Integrators (SIs). Canara Bank was the leading promoter and strategic planner for Brickwork.
The registered office address of Brickwork is:
3rd Floor, Raj Alkaa Park
29/3 & 32/2, Kalena Agrahara
Bangalore – 560 076
Tel: +91 (80) 4040 9940
Fax: +91 (80) 4040 9941
SMERA Ratings Limited:
SMERA analyses and establishes the credibility of existing micro, small, and medium enterprises (MSMEs). MSMEs can improve, grow, and avail cheaper/faster loans. The registered address SMERA Ratings is:
Unit No.102, 1st Floor, Sumer Plaza
Marol Maroshi Road, Marol
Mumbai 400 059
Tel: + 91 (22) 67141144/45
Fax: + 91 (22) 67141142
Infometrics Valuation and Rating Pvt Ltd:
This SEBI-registered, RBI-accredited credit rating agency was founded by finance professionals, former bankers, and administrative services personnel. It evaluates entities such as banks, non-banking financial companies, large corporates, and small and medium scale units (SMUs).
The rating agency is registered with SEBI under the following address:
Flat No. 104/108, 1st Floor
Sujan Singh Park
New Delhi 110003
Tel:+ 91 (11) 24601142, 24611910, 24649428
Fax No.:+ 91 (11) 24627549