Triple A

Crisil Ltd. is one of India’s leading credit rating agencies. It was the first company to commence credit rating operations in this country. Even though in recent years Crisil has diversified into other businesses as well such as advisory and research & information, rating remains its core business, contributing 53 per cent of its total revenue. Crisil is also the leader in the high-end knowledge process outsourcing (KPO) industry. Irevna, its subsidiary, provides offshore investment research to investment banks and financial institutions. It contributes 46 per cent of Crisil’s total revenue. Over the last five years, this business has clocked a topline growth in excess of 40 per cent. However, at 32 per cent, its operating margin is a little lower than that of the rating business (42 per cent). Crisil is currently a subsidiary of Standard & Poors (S&P), the global rating powerhouse. S&P, together with its associates, holds 52.43 per cent stake in Crisil. History Crisil was set up in 1987 by Asian Development Bank and ICICI Ltd, the erstwhile corporate lending company. Later Asian Development Bank sold its stake to S&P to help Crisil develop its analytical skills for rating local debt issues. In exchange, Crisil helped S&P in rating overseas fund raisings by Indian companies. In 2005, S&P took control of the company by buying out the shareholdings of ICICI Ltd and other key stakeholders via an open offer. Industry dynamics The world over credit rating is an exclusive profession. Even globally only a handful of companies can claim to be members of this club. Regulators worldwide like the number of credit rating agencies to be limited so that th

This article was originally published on August 24, 2011.