JOIN USThe four such agencies— Crisil, ICRA, Care and Fitch have witnessed a major spurt both in the number of companies getting rated and in revenues.
Country’s largest credit rating agency, Crisil Ltd, for example, had a net profit of Rs 35.46 crore in the quarter ended March 31, 2009, an increase of 16 per cent from the corresponding period previous year. Its consolidated income stood at Rs 122.88 crore in the March 2009 quarter a rise of 15 per cent. Revenue growth was driven by increased demand for bank loan ratings with around 500 new bank loan ratings announced during the quarter.
Talking to Deccan Herald, Crisil Ratings Senior Director Raman Uberoi said, “the Bank loan ratings have played a significant part in the growth in the ratings revenues.”
Surge in revenue
Similarly, ICRA’s total income for quarter ended March 31, 2009 jumped 63 per cent to Rs 32.27 crore as against Rs 19.84 crore in the corresponding quarter of the previous fiscal. It’s net profit was also higher by 46 per cent at Rs 12.08 crore in the quarter ended March 31, 2009. The company attributes the growth in rating services income during fiscal 2008-09 mainly to the increase in income from corporate sector ratings. The quantum or the number of ratings undertaken by Crisil in the 2008-09 fiscal compared to the previous fiscal has gone up significantly. In the quarter ending 31 March 2009 Crisil had 540 new bank loan ratings taken by corporates. Also, there has been a 50 to 60 per cent year-on-year increase in the number of ratings undertaken by Fitch from 2007 to 2008, primarily on account of Basel II norms.
Growth in volumes
ICRA Senior Vice President & Regional Head-South Jayanta Chatterjee said, “the quantum of ratings undertaken by the agency in the 2008-09 fiscal have gone up significantly. In fact, a lot of companies have been driven get themselves rated which earlier had not done so.” To cope with the spurt in rating activities, these agencies are recruiting more people. Chatterjee said, “There has been an approximate 70 to 80 per cent increase in manpower in the past year and we are still in the process of recruiting analysts. And we have expanded and taken on more area in our already existing locations in Bangalore, Chennai, Gurgaon (near New Delhi), and Mumbai.”
Similarly, the number of corporate analysts in Fitch has virtually doubled in the past two years, which has helped them cope with the increased workload. In 2007, Crisil had a staff of 644 people in the ratings segment (corporate analysts and support staff), which has gone up to 783 in December 2008.