Indies Expand in India


New York, NY – Following in the wake of CRISIL’s decision last Fall to begin offering independent equity research on domestic issuers, Indian ratings providers Credit Analysis and Research Ltd (CARE Ratings) and ICRA Limited, are considering similar initiatives.  The efforts of these three ratings providers are meant to fill the gap faced by many mid-cap and small cap Indian companies who lack sufficient research coverage from the investment banking and brokerage industry.

A survey published by CRISIL last year indicated that only 100 of 3,500 active listed companies in India receive adequate research coverage, with most of this coverage coming from firms that also provide investment banking services for these issuers.  This finding led CRISIL, India’s largest ratings agency, to be the first ratings agency to jump into the equity research business in September, 2009.  Click here to read more about this initiative.

According to industry insiders, CARE Ratings’ board approved the launch of a new equity research product at a recent meeting.  Details of the proposed service have yet to be made public.  ICRA management is also said to be considering such a service.  The three ratings agencies expect that institutional investors, stock exchanges, and the companies themselves will want to pay for their unbiased research coverage.

Integrity’s Perspective

A recent report published by Dunn & Bradstreet revealed that Indian GDP growth is expected to surge 8.3% during 2010-11, driven by robust industrial growth and resilient performance of the service sector.  Over the longer term, D&B projects an average growth of around 9.5% to 10% per annum during the next five years.  This will enable India to become one of the world’s largest economies by 2020. 

It is clear to the team at Integrity Research that the equity research business in India is likely to grow rapidly in the coming decade as the Indian economy and stock market expands, and as international investors seek out unbiased analysis of under covered stocks. 

While boutique firms have filled much of the need for independent research in the US, it quite possible that ratings agencies like CRISIL, CARE Ratings, and ICRA will become the dominant suppliers in India given their established brands, extensive research resources, and international partnerships.  Of course, the biggest issue is whether these three ratings providers can convince someone to pay for the research they plan to produce.


Credit Rating and Information Services of India Ltd. (CRISIL), India’s leading ratings, research, risk and policy advisory firm, was founded in 1987.  Global ratings agency, Standard & Poor’s, has since become CRISIL’s majority shareholder.  CRISIL provides domestic and international customers (through its Irevna subsidiary) with independent information, opinions and solutions related to credit ratings and risk assessment; energy, infrastructure and corporate advisory; research on India’s economy, industries and companies; global equity research; fund services; and risk management. CRISIL is based in Mumbai.

About CARE Ratings

Founded in April 1993, CARE Ratings is a full service rating company that offers a wide range of rating and grading services across sectors.  CARE is recognized by the Securities and Exchange Board of India (Sebi), the Government of India (GoI) and the Reserve Bank of India (RBI).  CARE has seven offices in India located at – Mumbai, Delhi, Kolkata, Chennai, Hyderabad, Bangalore and Ahmedabad.

About ICRA Limited   

ICRA was established in 1991 by leading financial/investment institutions, commercial banks and financial services companies as an independent and professional Investment Information and Credit Rating Agency.  Since its inception, Moody’s Investor Services has become ICRA’s largest shareholder.  In addition, Moody’s provides ICRA with certain high-value technical services aimed at benefiting ICRA’s in-house research capabilities, and gives the firm access to Moody’s global research base.  ICRA is a Public Limited Company, with its shares listed on the Bombay Stock Exchange and the National Stock Exchange.


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