Standard & Poors Buys Out Adb Stake In Crisil

Standard and Poors, the worlds largest rating service, has bought out Asian Development Banks 9.6 per cent stake in Credit Rating Information Services of India Ltd (Crisil).

S&P signed an agreement acquiring the entire ADB stake in Crisil this week. Since the acquisition was a negotiated deal, the price has been kept a secret. The Crisil scrip is trading at around Rs 250 at present. The transfer of shares is subject to the approval of the Reserve Bank of India.

ABD was a promoter institution of Crisil along with Industrial Credit and Investment Corporation of India (ICICI) and the Unit Trust of India (UTI).

 

ADB had picked up 600,000 shares of Crisil at par in October 1987 under its multilateral institutions market development programme.

S&P and Crisil had been wanting to enter into an equity tie-up for a long time. However, this did not materialise as Crisil was averse to issuing fresh equity.

Crisil has a Rs 6.2 crore equity base and its net worth as of March 31, 1996, stood at 29.19 crore.

Crisil managing director R Ravimohan told newsmen yesterday that the entry of S&P as an equity holder will not make a major difference to our existing relationship. S&P has a year-old strategic alliance with Crisil, under which they jointly rate companies.

However, the Crisils information services wing CRIS does not have any joint programmes with S&Ps financial services division. Ravimohan feels that this is one area where S&P and Crisil can work together.

In a press release, Loe Oneill, president and Chief Rating officer, S&P said: We are delighted to strengthen our ties with Crisil, which continues to build its analytical capabilities and credibility in India throughout the region.

Crisil is the first rating company where S&P has opted for a minority stake. In most of its ventures, S&P either holds 100 per cent or majority stake.