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Credit rating is an assessment of the default probability on payment of principal and interest on a bond. The credit ratings are based on strengths, weaknesses and financials of the issuer. This also includes comprehensive evaluation of the industry as well as regulatory, macro-economic and political environment. It is classified into investment-grade ratings (credit ratings ranging from AAA to BBB) and non-investment-grade ratings (credit rating BB and below).
Bond credit rating is a preliminary check for investors to filter out safer and riskier bond options. Conservative investors can focus on investment grade corporate bonds, i.e., AAA to BBB-rated bonds, for safety and capital preservation. On the other hand, aggressive investors can invest in speculative grade bonds, i.e., BB and lower, for higher returns.
SEBI (Credit Rating Agencies) Regulations, 1999 regulates credit rating agencies and provides for eligibility criteria for registration, monitoring and review of ratings, proper rating process, avoidance of conflict of interest and inspection of rating agencies by SEBI, and other things.
Ways to Check Bond Credit Ratings Online
Investors can check bond credit ratings in India online in the following ways:-
Credit Rating Agencies (CRAs)
Investors can directly visit the websites of registered credit rating agencies for the most accurate and detailed reports. Here are the list of credit rating agencies in India registered with SEBI:-
| Credit Rating Agency | Address |
| CRISL Ratings Limited | CRISIL House Central Avenue Hiranandani Business Park Powai |
| ICRA LIMITED | 1105, Kailash Building, 11th floor, 26 Kasturba Gandhi Marg, New Delhi |
| India Ratings and Research Pvt. Ltd.
(Formerly Fitch Ratings India Pvt. Ltd.) |
Wockhardt Towers, 4th Floor, West Wing,
Bandra Kurla Complex, Mumbai |
| CARE Ratings Limited | Godrej Coliseum 4th Floor Somaiya Hospital
Road, OFF Eastern Express Highway Sion E |
| Acuite Ratings & Research Limited
(Formerly SMERA) |
708, Lodha Supremus, Lodha iThink Techno Campus, Kanjurmarg (East), MUMBAI, MAHARASHTRA, 400042 |
| Infomerics Valuation and Rating Pvt. Ltd. | 104 & 108 (1st Floor), Golf Apt., Sujan Singh Park, Maharishi Ramanna Marg, New Delhi |
| BRICKWORK RATINGS India Pvt. Ltd. | 3rd floor, Raj Alkaa Park, 29/3 & 32/2, Kalena Agrahara, Bannerghatta Road, Bengaluru |
| ACER CREDIT RATING Pvt. Ltd. | Unit 808, 8th FLR, Sec-30, Signature Tower-B, Basai Road, GURUGRAM, HARYANA, 122001 |
Prospectus or the Offer Document of the Issuer
According to the regulations of listing of debt securities, the issuer has to mandatory disclose the details of the credit ratings in the prospectus, shelf prospectus or information memorandum. Further, issuer’s annual report mentions the credit rating under section Management Discussion and Analysis, Liquidity and Capital Resources section, or specific instructions to financial statements.
Stock Exchange Websites & Other Regulatory Sources
- The NSE Debt Centralised Database provides the name of credit rating agency, credit rating assigned, rating action, date of credit rating obtained, etc., details for listed companies.
- In case of a private placement of bond, the credit ratings obtained including unaccepted ratings, if any, is required to be disclosed in the listing particulars filed with the recognized stock exchange.
Why are Bond Credit Ratings Important
- Bond credit ratings helps investors to make informed investment decisions when investing in bonds in India that align with their investment goals and risk appetite.
- It provides transparency to the investors regarding the creditworthiness of the bond issuer.
- Not only to investors, a favorable credit rating helps issuers to raise funds from markets at lower interest rates. This lowers the cost of borrowing and attracts a broader investor base.