Credit Rating Agencies in India

A Credit Rating agency is a Corporate body/company that assigns credit ratings for issuers of certain types of debt obligations as well as the debt instruments themselves. Mostly the issuers of securities are Government body, state and local government, companies, non-profit organizations who issues debt like instruments or securities like bonds etc that can be traded in secondary market. The role of credit rating agencies. A credit rating of an issuer takes into consideration the issuer's credit worthiness. (i.e. its ability to pay back a loan), and effect the interest rate applied to the particular security being issued. A company that issues credit scores for individual credit-worthiness is generally called credit bureau or consumer credit reporting agency. ( Source: Wikipedia)

The major Credit Rating Agencies in India are:

CARE - Credit Analysis and Research Limited
ICRA - Investment Information and Credit Rating Agency of India
CRISIL - Credit Rating Inormation Services of India Limited.
DCR India - Duff and Phelps Credit Rating India Pvt. Ltd.
ONICRA Credit Rating Agency of India Ltd.

Rating awarded by major Credit Rating Agencies in India are:

AAA - Highest Safety
AA - High Safety
A - Adequate Safety
BBB - Moderate Safety
BB - Sub moderate Safety
B - Inadequate Safety
C - Substancial Risk
D - Default

Credit ratings are very important aspect to know the financial health of a company. All Mutual funds debt schemes and Fixed Maturity Plans (FMP)provide details of investments made with their respective Credit ratings in their portfolio. Investors should always check credit ratings before making any investments in such Debt funds or any other debt instruments.

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