Credit rating agencies in focus; ICRA surges over 10%

ICRA rallied 15% to Rs 4,144 in intra-day trade. CRISIL surged 7% to Rs 2,240, and CARE up 2% at Rs 1,214 on the BSE.

Shares of credit rating agencies – ICRA, CRISIL and Credit Analysis and Research (CARE) – rallied by up to 15% on the BSE after the Reserve Bank of India (RBI) on Thursday announced a package of measures for the development of fixed income and currency markets. LINK

Pawan Agrawal, Chief Analytical Officer, CRISIL Ratings said, indeed, the RBI is changing the landscape of lending in India. This is a comprehensive set of guidelines that will address multiple issues. It will reduce the disproportionate role that bank loans have in corporate funding, materially improve corporate bond market liquidity, and afford greater role for global investors. The rules will also encourage innovation, and sharpen focus on risk-mitigation tools.

“In an unrelated development, the RBI has imposed a risk weightage of 150% for unrated bank exposures above Rs 200 crore. This will increase the use of credit ratings,”he adds.

Among the individual stocks, ICRA has rallied 15% to Rs 4,144 on the BSE in intra-day trade. CRISIL surged 7% to Rs 2,240, and Credit Analysis and Research (CARE) up 2% at Rs 1,214, as compared to 0.05% rise in the S&P BSE Sensex.