The full form of ICRA is Investment Information and Credit Rating Agency. The ICRA is immensely popular for its unique and beneficial functions. The Investment Information and Credit Rating Agency is an effective entity for providing investment data to investors.
The ICRA was updated and changed from IICRA to the current ICRA in 1991.
In 2007 the month of April, the ICRA became a public company. The ICRA changed the company’s structure from being a private limited company to a public company.
The share of ICRA is on the National Stock Exchange (NSE) & Bombay Stock Exchange (BSE). This is a joint venture company formed by various commercial banks of India and a few other financial services as well.
The ICRA company renders numerous facilities to several investors, entities, persons, and creditors. These unique facilities are as follows:
- It guides several investors, entities, persons, and creditors.
- It provides the Rating to companies in the multi sector to help in deciding the investment decision for the company.
- They render their advanced services to the intermediaries to enhance the effectiveness of the process of fundraising.
- ICRA encourages transparency in the markets by monitoring and regulating several entities.
- To enhance the borrower’s capability to hit the extensive volume of resources.
ICRA Unique Factors
The Investment Information and Credit Rating Agency is famous for its various unique features, and they are as follows:
- This entity is a summation of several other companies and their subsidiaries.
- The ICRA is a public company and has limited shares.
- ICRA is listed on BSE and NSE.
- This entity is one of the most prominent credit rating agencies in the entire country.
- This entity rates the debt instruments presented by FI(financial institution)’s, undertakings of the government sector, manufacturing firms, commercial banks, and more.
- This credit rating agency has an alliance with Moody’s Investor Service. It is the most prominent stockholder of ICRA.
Companies covered under ICRA Rating:
ICRA provides the Rating to companies in Below Sectors:
- Financial Sector
- Structured Financial Sector
- Infrastructure Sector
- Mutual Funds and Debentures
- Public Finance Sectors
- Corporate Debt Rating
Criteria of ICRA rating
As mentioned above, ICRA renders the services of credit rating for numerous debt instruments and entities based on a few conditions. The ICRA provides credit ratings for the following types of securities.
- Securities for a long period
The instruments like NCD with a period of 1 year or more comes under the category of long period securities. The ICRA rates the debt instruments in the range of [ICRA]AAA to [ICRA]D,
- [ICRA]AAA – Such an entity has the highest rating from the ICRA.
- [ICRA]AA – High rating
- [ICRA]A – Adequate degree of safety
- [ICRA]BBB – Moderate degree
- ICRA]BB – Moderate risk
- ICRA]B – High Risk
- ICRA]C – Very High Risk
- [ICRA]D showcases Highest risk for the investors and expected to default very soon.
- Securities for a medium period (only for Public Deposits)
Programs relating to public deposit come under the category of Securities of the medium period. For these securities ranges, the ICRA rates the securities of the medium period as:
- MAAA – the highest rating of ICRA.
- MAA – The highest-credit-quality
- MA – The highest-credit-quality
- MB – Adequate Credit Quality
- MC – Inadequate Credit quality
- MD – The lowest rating from the ICRA.
- Securities for a short period
The instruments about the period of less than one year come in the rating category of short period securities.
In the category, the ICRA gives its rating based on:
- [ICRA]A1 – Highest rating from ICRA.
- [ICRA]A2 – medium rating
- [ICRA]A4 – medium rating
- [ICRA]D – involves risk for the investors and also is the lowest rating provided by ICRA.