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written by | April 11, 2022

Everything You Need to Know About the Credit Rating Agencies in India

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Credit rating agencies in India determine the creditworthiness of all borrowers, whether they are individuals or corporates. They play a very significant role in assisting financial lenders like banks or other financial institutes to understand the eligibility of individuals who have applied for loans. Indian rating agencies are of immense help to financial lenders as they help them to identify the various risks involved in offering credit facilities to individuals who have a poor credit history. These credit-rating companies function in a manner that makes the finance lenders understand the various risks entailed in approving loans of individuals with a poor credit history. The rating agencies in India resort to a range of metrics and factors that they employ to assess repayment capabilities. The borrowers could be the government, enterprises, non-profit organisations, single individuals, local government bodies or even partnership firms. The assessments made by these agencies are done on a quantitative as well as a qualitative basis. There are seven renowned credit agencies in India, namely, ICRA, SMREA, CRISIL, CARE, Infomerics Valuation and Rating Pvt. Ltd, India Ratings and Research Pvt. Limited, and Brickwork Ratings. Most of these rating agencies in India were established in the latter part of the 1980s. The ratings offered by these agencies are in the form of alphabetic letters like CCC or AAA.

Did you know?

The Securities and Exchange Board of India, better known as SEBI, regulates all the credit rating agencies in India

Exploring some of the Top Credit Rating Agencies in India

Following is the list of credit rating agencies in India, their responsibility as a financial unit of the country, and their contact information.

Credit Rating Information Services of India Limited-CRISIL

The Credit Rating Information Services of India Limited, better known as CRISIL, was started in 1987 and is one of the most reputed and oldest credit rating agencies in India. CRISIL holds a 60% market share of the rating agencies in India. Some of its key services extend across industries like manufacturing, SME sectors, service, and finance. CRISIL is based out of India’s commercial capital, Mumbai. Standard & Poor, the world’s biggest rating agency, has a major stake in CRISIL.

  • Contact address: CRISIL Limited, CRISIL House, Central Avenue, Hiranandani Business Park, Powai, Mumbai, 400076
  • Email: info@crisil.com

Also Read: Importance of Credit Rating in India

Credit Analysis and Research Limited-CARE

CARE was established in the early part of the 1990s in Mumbai city. This credit rating agency in India provides two types of ratings on bank loans. One is the small short-term, and the other, the long-term. Investors make use of its credit ratings for making key decisions on the premise of the credit risk as well as the expectations from such risks. Its ratings are useful in enabling companies to raise funds to fulfil all their requisite investments. CARE enjoys the support of Unit Trust of India (UTI), Industrial Development Bank of India (IDBI), and Canara Bank, in addition to a few other finance-lending entities.

  • Contact address: 4th Floor, Godrej Coliseum, Somaiya Hospital Road, Behind Everard Nagar, Off Eastern Express Highway, Sion (East). Mumbai – 400 022
  • Email: care@careratings.com 

Brickwork Ratings India Private Limited

This credit rating agency in India, in addition to being regulated by SEBI, also enjoys authorised approval from the Reserve Bank of India. Established in the year 2007, this agency offers ratings to Municipal corporations, Financial institutes, Bank loans, and Small and Medium Enterprises (SMEs) and provides grades to Education institutes, Non-Governmental Organisations, and Hospitals, among many others.

  • Contact address: 3rd Floor, Raj Alkaa Park,29/3 & 32/2, Kalena Agrahara, Bannerghatta Road, Bangalore-560076
  • Email: info@brickworkratings.com

India Ratings and Research Pvt. Ltd.

Earlier known as Fitch Ratings India PVT Ltd, this credit rating agency in India provides credit ratings to Project finance companies, Insurance companies, Financial institutions, Urban local bodies as well as Managed funds, to name a few. Besides being regulated by SEBI, this agency is also recognised by two other reputed entities, namely, the National Housing Bank as well as the Reserve Bank of India. This agency has its offices spread across other metros like Chennai, Bengaluru, Kolkata, Delhi, as well as cities like Hyderabad and Pune.

Infomerics Valuation and Rating Pvt. Ltd.

This credit rating agency has the accreditation of the Reserve Bank of India in addition to being recognised by SEBI. It provides ratings to Banks, Small and Medium Scale Units, Corporates, and Non-Banking Financial Companies, among many other lenders. It is renowned for furnishing transparent reports which are precise and all-inclusive. It is also well-known for giving very fair and unbiased credit ratings to all.

  • Contact address: Flat No. 104/108, 1st Floor, Golf Apartments, Sujan Singh Park, New Delhi 110003.
  • Email: vma@infometrics.com 

Acuite Ratings & Research

This rating agency in India was earlier known as Small Medium Enterprises Rating Agency of India Limited (SMERA). The two principal divisions of this agency include the Bond Ratings and the SME Ratings. This agency assesses the creditworthiness of Micro, Small, and Medium Enterprises (MSMEs).

  • Contact address: Unit No. 102, 1st Floor, Sumer Plaza, Marol Maroshi Road, Marol, Andheri (East), Mumbai-400059
  • Contact Number: (22) 67141142 

Also Read: What differentiates your credit score from the CIBIL credit rank?

Credit Rating Agencies and how they function

Credit rating agencies in India evaluate the creditworthiness of the borrowers like local government bodies, corporates, state governments as well as non-profit organisations, among many others. The assessment is done on the basis of the credit history of these borrowers. The various factors taken into consideration are the earlier credit repayment patterns, the number of debts, the various financial statements, the earlier patterns of repayment of credit taken, and the borrowing patterns as well. These agencies make their assessments in accordance with these factors and then share their analysis with the finance-lending bodies to enable them to make appropriate decisions towards the lenders. A positive credit rating affirms the creditworthiness of the borrowers, which makes their loan applications get speedy approvals. This also makes the lenders offer the credit at very reasonable rates of interest.

Conclusion

The details of this article would have provided you with a clear roadmap on some of the leading credit rating agencies in India and how they function and assist finance lenders in making timely decisions in approving loans at appropriate rates of interest. These agencies facilitate the loan approvals by offering their invaluable inputs to the banks and other financial institutes, which are approached with numerous applications for loans.

Follow Khatabook for the latest updates, news blogs, and articles related to micro, small and medium businesses (MSMEs), business tips, income tax, GST, salary, and accounting.

FAQs

Q: How is a Credit Score Different from a Credit Rating?

Ans:

A credit rating is furnished by a credit rating agency like CRISIL, CARE, ICRA or Brickwork Ratings. The process of credit ratings helps to assess the creditworthiness of various types of borrowers, some of whom could be corporates, governments, commercial businesses or even individuals. The ratings are expressed in an alphabetic format like AAA or A+. Credit scores are calculated by the various Credit bureaus of India. Some of these include Experian, CRIF Highmark, TransUnion CIBIL, and Equifax. Credit scores are numbers with 3 digits, and they range between 300 and 900. A credit score of 750 or above is considered a healthy and good credit score. The higher the credit score, the faster the approvals for the loans.

Q: Do Good Credit Ratings Help Borrowers?

Ans:

Good credit ratings indicate the loan-repayment ability of the borrowers, whether it is a single individual or corporates, governments or non-profit organisations. A good credit rating makes it very easy for borrowers to avail quick approval of their loans and at very reasonable rates of interest as well.

Q: In What Format do Credit Rating Agencies Give Ratings?

Ans:

All credit rating agencies provide ratings in an alphanumeric or letter-based format. Some examples of these include A1+, AAA, AA+, A1-, and A-.

Q: Which are Some of the Top Credit Rating Agencies in India?

Ans:

CRISIL, CARE, ICRA, Infomerics Valuation and Rating Pvt. Ltd, India Ratings and Research Pvt. Limited, and Brickwork Ratings are some of the top credit rating agencies in India.

Q: How Many Credit Rating Agencies are there in India?

Ans:

There are seven leading credit rating agencies in India.

Disclaimer :
The information, product and services provided on this website are provided on an “as is” and “as available” basis without any warranty or representation, express or implied. Khatabook Blogs are meant purely for educational discussion of financial products and services. Khatabook does not make a guarantee that the service will meet your requirements, or that it will be uninterrupted, timely and secure, and that errors, if any, will be corrected. The material and information contained herein is for general information purposes only. Consult a professional before relying on the information to make any legal, financial or business decisions. Use this information strictly at your own risk. Khatabook will not be liable for any false, inaccurate or incomplete information present on the website. Although every effort is made to ensure that the information contained in this website is updated, relevant and accurate, Khatabook makes no guarantees about the completeness, reliability, accuracy, suitability or availability with respect to the website or the information, product, services or related graphics contained on the website for any purpose. Khatabook will not be liable for the website being temporarily unavailable, due to any technical issues or otherwise, beyond its control and for any loss or damage suffered as a result of the use of or access to, or inability to use or access to this website whatsoever.
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Disclaimer :
The information, product and services provided on this website are provided on an “as is” and “as available” basis without any warranty or representation, express or implied. Khatabook Blogs are meant purely for educational discussion of financial products and services. Khatabook does not make a guarantee that the service will meet your requirements, or that it will be uninterrupted, timely and secure, and that errors, if any, will be corrected. The material and information contained herein is for general information purposes only. Consult a professional before relying on the information to make any legal, financial or business decisions. Use this information strictly at your own risk. Khatabook will not be liable for any false, inaccurate or incomplete information present on the website. Although every effort is made to ensure that the information contained in this website is updated, relevant and accurate, Khatabook makes no guarantees about the completeness, reliability, accuracy, suitability or availability with respect to the website or the information, product, services or related graphics contained on the website for any purpose. Khatabook will not be liable for the website being temporarily unavailable, due to any technical issues or otherwise, beyond its control and for any loss or damage suffered as a result of the use of or access to, or inability to use or access to this website whatsoever.