Credit Rating Agency aka CRAs are companies that have a significant role in capital markets that also structure Finance instruments.
But what are they precisely for? These are companies that assign credit ratings as the name suggests wherein the rate a debtor has to pay back as a debt makes timely interest payments and as the hood of default.
What are the debt instruments in CRAs inclusive of? Government bonds, Corporate bonds, CDs, municipal bonds, preferably stock, mortgage-backed securities, collateralized debt obligations, etc.
List of credit rating agencies in India
|3||Credit Information Bureau|
|5||SMERA Rating Limited|
|9||Brick Work Ratings|
ICRA an independent and a professional investment information that was initially named as Investment Information and Credit Rating Agency of India Limited. India’s top rated company in customer base and ratings has created investment grade that conveys likelihood of default which means the possibility of the debt obligation not being met as promised. Founded in the year 1991 and headquartered at Gurgaon it also provides ‘Financial Consulting’.
ICRAs also assigns:-
1) Corporate Governance Ratings
2) Performance Ratings
3) Gradings and Rankings to mutual funds
4) Construction Companies and hospitals
They believe in creating an unbiased view of various stakeholders and nodal agencies of the Governance of India. The sectors they structure in are Health, Agriculture and Education. Onicra believes in:-
1) Rating data – Industry wise distribution, rating distribution, geographical distribution.
3) Services they provide are MSME Rating, Vendor and Associate rating, education grading, healthcare grading, solar energy grading and APMC Grading.
The services they provide in Credit formation is:-
1) Risk assessment and scoring –They have a highly maintained simple sale approach for identification, rigorous analysis and scoring based on advanced analytics.
2) Areas of expertise – Employee risk assessment, customer risk assessment.
3) Employee background screening that helps employers reduce theft, violence substance abuse and negligent hiring abilities.
4) Decision analytics
- Credit Information Bureau:
CIBIL is a credit information Company that started off In the year 2000. They have contributed immensely to the India’s financial system. Whether it is providing loans to manage business terms or help consumers secure credit at a faster pace CIBIL is the best option to consult. They have a record of individuals payments pertaining to loans and credit cards. Promoted via State Bank of India it reduces the effect of asymmetric information between the lenders and the borrowers and alleviates problems of adverse selection such as BOPs.
A global analytical company based on providing ratings, research, risk and policy advisory services to customers. Over 90% of commercial banks in India use CRISIL for industry research for credit decisions. Their costumes range from any small enterprise to corporations very giant or financial institutions outside India that are inclusive of world’s largest banks.
Founded in the year 1987, helps in shaping policy and establishing viable frameworks to improve the risk profile of infrastructure projects.
The promoter of foreign institutions, public shareholding, ADRs and GDRs, etc.
- SMERA Rating Limited:
An agency that has a joint venture with Small Industries development Bank of India, Dun and Bradstreet information services India limited and leading public and private sector banks. The agency has received accrediting from Reserve Bank as External Credit Assessment Institution under BASIL.
The credit they provide are:-
a)Credit Rating Services –
1)Long term loans, cash credit, working capital
Short term – Packing Credit/Post shipment credit/bank guarantee/ letter of credit
2)Credit rating on fixed deposit
- b) Grading services – NSIC, MSME RATING, MFI grading, MTI and Solar grading.
- c) Other services
- High Mark:
Started off in the year 2005 is headquartered in Mumbai that provides services Credit Information Products, Risk Analytics & Advisory and Software Solutions.
It has a complete record of loan repayment history on credit facilities that extends to an individual’s before extending credit.
They also keep non-performing loans in the check. What are non-performing loans? When repayments of interest and principal are last due by 90 days or more or at least 90 days of interest payments, have been capitalised, refinanced or delayed by agreement or payments are less than 90 days overdue.
- Fitch Ratings:
1914 saw the start of Fitch Ratings has long-term ratings and short-term ratings that have the best investment grades like AAA – Best quality companies, reliable and stable, AA- Quality companies, a bit higher risk than AAA, BBB – Medium class companies. Non-investment grades have BB –More prone to change with the economy, B – financial situation varies noticeably, CCC – currently vulnerable and dependent on the changes in economic conditions, CC – hazardous bonds, D –defaulted on obligations, NR- Not publicly rated.
They provide fixed income products and professional development services to financial problems.
- Equifax India:
The ability to process millions of data records submitted by its members and convert it into usable information for customers. The company offers multiple industries including banking and financial services, insurance, telecom, background verification agencies, etc.
The categories it offers are:-
1) Commercial Information Solutions
2) Consumer information solutions
3) Personal information solutions
4) Workforce Solutions
5) Small business solutions
6) Technology and analytical series
- Brick Work Ratings:
An SEBI, RBI and NSIC registered credit rating agency offers Bank loans, NCD, SME ratings. What are the rating services categories? It includes issuer ratings, short-term ratings, long-term ratings, fixed deposit rating, mutual funds rating and MSE ratings. Theses ratings also include buyers credit, external commercial borrowings, Bill purchased or fake bills of exchange, preference shares, certificate of deposits, a score of municipal corporations, corporate governance ratings, etc.
The rating process goes about in a well-defined and updated criteria method. The commercial terms of the rating systems, prospective entities are all developed by the business group. The analytical group analyses rating assignments and rating risks involved.
- Care Ratings:
Started off in 1933 it is the second largest credit rating agency in India.
It provides the entire spectrum of credit rating that enhances corporates to raise capital for various requirements, assists investors to have an informed investment decision.