CARE RATINGS LIMITED

CARE Ratings Limited was formerly incorporated as Credit Analysis & Research Limited (CARE) on April 21, 1993. The Company then changed its name from Credit Analysis & Research Limited to CARE Ratings Limited on February 22, 2017. Credit Analysis & Research Ltd (CARE) commenced its operations in 1993 has established itself as the leading credit rating agency of India. The Companyprovides various credit ratings that help corporates to raise capital for their various requirements and assist the investors to form informed investments decision based on the credit risk and their own risk-return expectations. CARE Ratings is a full service rating company that offers a wide range of rating and grading services across sectors. The company is recognized by Securities and Exchange Board of India (SEBI), Government of India (GoI) and Reserve Bank of India (RBI) etc. CareEdge Ratings provides ratings for a variety of industries, such as manufacturing, infrastructure, and the financial sector, which includes banking, and non-financial services. The Company has played a pivotal role in the development of bank debt and capital market instruments, such as commercial papers, corporate bonds and debentures, and structured credit. The company was promoted by major Banks/ FIs (financial institutions) in India. The company carries out rating of the debt instruments, namely structured obligations, Commercial paper, Debentures, Fixed deposits and Bonds, covering the full spectrum of Universe comprising Industrial Companies, Service companies, Infrastructure companies, Banks, Financial Institutions (FIs), Non-Bank Finance companies (NBFCs), Public Sector Undertakings (PSUs), State Government Undertakings, Municipal Corporations, Structured Finance Transactions, Securitization Transactions, SMEs, SSI and Micro Finance Institutions. In addition to debt ratings, the company has experience in providing specialized grading/rating services, such as Corporate Governance ratings, IPO grading, Mutual Fund Credit quality Ratings, Insurance Claims Paying Ability Ratings, Issuer Ratings, Grading of Construction entities, Grading of Maritime training institutes and LPG/ SKO Ratings. The company's Credit Rating is an opinion on the relative ability and willingness of an issuer to make timely payments on specific debt or related obligations over the life of the instrument. CARE rates rupee denominated debt of Indian companies and Indian subsidiaries of multinational companies. The Research and Information division of CARE provides contemporary research and information covering various industries and financial markets. Publications include Industry Research Reports with Updates, Debt Market Review, Budget Analysis, other policy impact analysis, and special commentaries on topical issues. The company had established the Research Division in June 2006. During the financial year 2007-08, the company entered into an agreement to provide technical assistance to a rating agency in one of the Latin American countries. During the year 2008-09, the Research Division added 5 new sector reports, namely Gems & Jewellery, Shipbuilding, Retail, Construction and Coal. During the year 2009-10, CARE Research launched reports in respect of sectors such as banking, two wheelers, passenger vehicles, sugar, man-made fibres and natural gas. They developed a new product known as 'Industry Risk Scores' which gives ranking to each industry on a five-point scale on both structural and financial parameters. Also, they launched CARE Online Reports Distribution System, whereby the reports can be purchased by subscribers by making online payment. The reports can be viewed online. During the year 2010-11, CARE acquired license to operate credit rating operations in Maldives and launched new products including equigrade, ESCO grading, RESCO grading and financial strength grading of shipyards, edugrade and real estate project star ratings. The company also started rating services for perpetual bonds issued by non financial service companies. In 2011-12, CARE has acquired 75.13% of the issued and paid up equity share capital of Kalypto Risk Technologies Private Limited'. Kalypto is engaged in the business of providing risk management software solutions and offers products with exclusive focus on banking and financial services domain and addressing the areas of enterprise risk management. During the year, the company also acquired indirect recognition as an external credit assessment institution from Hong Kong Monetary Authority. CARE Ratings made a Public Offer of 7,199,700 Equity Shares through Offer for Sale made in December, 2012. During the financial year ended 31 March 2014, the company allotted 446,310 equity shares of Rs. 10 each to Ascent India Fund III, at a price of Rs. 560.15 per share (including Rs. 550.15 towards share premium) aggregating to an issue price of Rs. 250,000,547 to comply with the minimum capitalization norms applicable to non-fund based non-banking finance companies in connection with the IPO of the company undertaken in December 2012. During the year, the company rated India's First Securitization Transaction backed by Mortgage Guarantee. During the course of the year, the company launched the ratings of infrastructure debt funds. A consortium led by CARE bagged the prestigious assignment for development of a Green Rating Model for MSMEs. The project is a part of the initiative from Global Environment Facility (GEF) through SIDBI. During the year, the company widened its reach by having its business development team in 53 locations. For furthering business with area-wise focus, the company opened an office in Chandigarh. During the year, CARE Kalypto Risk Technologies and Advisory Services Pvt Limited received a mandate to implement its Funds Transfer Pricing and Customer Profitability Solution at a reputed private bank in India. The company also upgraded its Rating Engine at a leading bank in Sri Lanka. The Company also successfully completed rolling-out its credit risk solution at a large bank in Vietnam, which was a first-of-its-kind, thereby enabling the bank to become a pioneer in the credit risk automation space in Vietnam. The Company also successfully completed rolling-out the 1st Phase of its Kalypto/IFRS solution at a bank in Sri Lanka. The Company further expanded its geographic reach with the sign-on of a bank in the Philippines for its market risk solution. During financial year ended 31 March 2015, the total number of rating assignments completed by the company grew by 1.4% while the aggregate volume of debt rated recorded a significant increase of 23.8%. The growth in volume of debt rated is attributed to the significant increase of 29.6% in volume of debt for medium and long term instruments. Besides, the volume of debt of bank facilities which accounts for a larger portion of 59% of the total debt rated too increased by 15.9% contributing significantly to the aggregate debt rated. The company added 3,878 new clients during the year. The company widened its reach with business development team in 69 locations. The company opened a branch in Coimbatore during the course of the year. During the year, CARE Ratings continued to market the grading products like education, real estate, equigrade etc. besides launching some new products. During the year, the company made some inroads into mutual funds rating and rated 36 schemes. The number of assignment under (RESCO) increased from 43 to 217 and those for (ESCO) from 11 to 40. The company rated the first Alternative Investment Fund (AIF) which is an opinion on the asset selection ability and asset management capabilities in their respective segments for these schemes. These ratings are based on the evaluation of the sponsor, evaluation of the asset management company, investment process adopted by the asset management company (AMC), risk management systems and operations/technology set up. CARE also rated the first green infrastructure bond issued by YES Bank. Also ITI grading was launched for rating of industrial training institutes under Directorate General of Employment and Training (DGE&T). CARE's SME team collaborated with the office of the Development Commissioner - MSME, Ministry of MSME, in developing a rating model for enterprises with ZED (Zero Effect Zero Defect) orientation under the Make in India campaign. The rating model will also be utilized for identifying capable enterprises for availing of business opportunities under Defence Offset Policy of the Government of India. In 2014-2015, CARE had rated 1,832 SMEs under the NSIC scheme compared with 1,047 in 2013-2014. The NSIC provides a subsidy to MSMEs for obtaining a rating from a recognized credit rating agency. This scheme has been in operation since 2005-06. The subsidy is a part of the Union Budget allocation which is presented annually. CARE Ratings acquired the entire remaining stake of 24.87% in CARE Kalypto Risk Technologies and Advisory Services Private Limited, making it 100% subsidiary of your company. CARE Ratings (Africa) Pvt. Ltd (CRAF) was incorporated on December 12, 2014 in Mauritius. During financial year ended 31 March 2016, the total number of instruments rated by the company declined by 5.6%. This was mainly due to the sharp fall in the number of assignments in the miscellaneous category which includes SME ratings among others. The number of assignments had increased for long term and bank facility ratings by 2.5% and 19.5% respectively. The total volume of debt rated decreased from Rs. 10.97 lakh crore to Rs. 10.85 lakh crore. During the year under review, the company focused on the second tier of companies which were entering the market for the first time. The combined effort resulted in an increase in new clients of around 3,000 during the year. The majority of these clients were of a small ticket size especially in the bank loan rating space. The company started a new subscription based service called CARE Rating Tracker (CART). It has data on the Rating History of over 40,000 entities covering all six Credit Rating Agencies. Over 40,000 companies classified under 120+ industries are included in this service. The company launched the rating of Real Estate Investment Trusts (REITs). A REIT is a corporation or a trust which utilizes the pooled capital of many investors to purchase, and in most cases, operate income-producing real estate such as offices, apartments, shopping complexes, hotels and warehouses. CARE's Rating of REIT fund is an opinion on the REIT's investment quality, based on the fundamental assessment of the REIT. CARE-REIT rating is assigned on a five-point scale from 1 to 5, with 'CARE: REIT-1' indicating highest investment quality and 'CARE:REIT-5' indicating poor investment quality. The company also launched grading of tourism facilities for Government of Karnataka where a rating by an entity would be eligible for concessions from the government. During the year under review, CARE Kalypto Risk Technologies and Advisory Services Private Limited procured highest ever order in its history. Through the competitive bidding process, it acquired order from the largest commercial bank in Sri Lanka viz. Bank of Ceylon (BOC) for Enterprise Risk Management Solutions. CARE Ratings (Africa) Private Limited (CRAF) is incorporated in Mauritius and is the first credit rating agency to be licensed by the Financial Services Commission of Mauritius w.e.f. May 7, 2015. CRAF commenced operations in August 2015 and has completed its first assignment. The other significant development has been the MoU with Japan Credit Rating Agency (JCR). The MoU talks of the two agencies working together closely to further mutual interests. As there are several Japanese companies operating in India, JCR would be encouraging them to get a rating from CARE in case any funding has to be procured from India. Similarly, the Japanese market has become important in the context of the interest rate differential between the two countries and CARE may refer company's seeking to raise funds from Japanese market to JCR. During financial year ended 31 March 2017, the company added 4,676 new clients. During the year, the total number of assignments rated by the company increased by 33.2%. This was mainly due to increase in number of assignments on account of long term rating and number of assignments in the miscellaneous category which includes SME ratings among others. However, the number of assignments decreased for bank facility ratings by 3.5%. The total volume of debt rated increased from Rs 10.85 lakh crore to Rs 13.18 lakh crore. The increase was mainly attributed to increase in volumes rated in the short, long term categories and bank facility ratings. In terms of volume of debt rated, the long term assignments witnessed an increase in share from 39% to 45.3% while that of bank facilities came down from 50.2% to 45%. During the year, CARE Ratings launched the Green Initiative Rating (GIR) aimed at measuring the green initiatives of entities beyond the basic compliance requirements. A risk assessment by an independent entity such as a credit rating agency would enable the lenders, the investors and the society at large to understand the initiatives undertaken by the company beyond minimum requirement for minimizing the adverse impact caused by the units' economic activity on the environment with focus on sustainability. Recognising the need for independent evaluation of cooperative banks, the company also developed the Cooperative Banks Financial Strength Grading. The product would focus on the financial strength/capability of a co-operative bank in long-term as well as short term. It indicates bank's intrinsic safety and soundness. The company started the CARE Executive Training Programme (CETP); conducting its first training programme on Fundamentals of Corporate Credit on 19 May 2016 at Mumbai. The company also signed a MoU subject to regulatory approvals in India and Nepal with Vishal Group Limited and Emerging Nepal Limited to start a credit rating agency in Nepal to be called CARE Ratings (Nepal) Limited. As per the terms of the MoU, CARE Ratings will hold 51% of the equity of NR 5 crore while Vishal group will own 19% and Emerging Nepal Limited 10%. The balance 20% will be held by banks, insurance companies, FIs and corporate bodies in Nepal subject to a maximum of 9% per legal entity. CARE Ratings (Africa) Private Limited (CRAF) got the recognition from Bank of Mauritius (BoM) as an External Credit Assessment Institution (ECAI) for all market segments w.e.f. May 9, 2016. Further, The African Development Bank has taken up close to 10% stake in CRAF. During the year, CRAF assigned ratings to 7 corporates. CARE Advisory Research and Training Limited is a wholly owned subsidiary of your company which was incorporated on September 6, 2016. CART is in the business of Training, Advisory and Research. It was incorporated with an Authorised Share Capital of Rs. 10 crores and a paid up share capital of Rs. 5 Lakhs. During the year, the company allotted 40,45,450 equity shares of Rs.10/- each at a premium of Rs. 1/- per share amounting to Rs. 4,44,99,950 on a preferential basis to CARE. During the financial year ended 31 March 2018, the company reviewed its efforts required for completion of various activities in the rating process in light of changes in Regulations, Business-Mix and Technological Enhancements. During the year, the total number of rating assignments of the company increased by 2.2%. This was mainly due to a decline in the NSIC-SME segment (under others) even as there was an increase in the number of assignments on account of bank facility ratings and capital market instrument ratings. The total volume of new debt rated increased from Rs. 13.19 lakh crore in 2016-17 to Rs. 16.48 lakh crore in 2017-18. This was mainly due to increase in volume of debt rated across categories such as short & medium term, long term and bank facility ratings. Within short and medium term instrument ratings, commercial paper was the dominant segment which was aided by the dual rating rule brought in by the RBI. CARE Ratings continued to have a focused team on the large and mid-corporate segments which works on both - augmenting the client portfolio through new client addition and maintaining relationships with the existing companies. These two prongs are required to keep the business improving in future. CARE Ratings was the first rating agency to assign rating to the consumer durable securitization in India during the year. During the year, the company also rated Partial guarantee bonds/Co-guarantee structured bonds as well as projects based on Hybrid Annuity Model in road projects. In line with the practices of most of the leading credit rating agencies across the country and the globe, CARE Ratings decided to replace the external rating committee comprising eminent independent professionals with an Internal Rating Committee comprising senior executives from within the ratings team w.e.f. April 1, 2017. As per SEBI guidelines, MD & CEO is not a part of such Rating Committees. CARE, on its website, discloses the rating process that it adopts for rating any instrument or facility. The website also gives a comprehensive insight into the various methodologies adopted by CARE for rating instruments from different industries. Further, key policy documents like CARE's approach to default recognition, suspension policy etc. are also available on the website. The company took advantage of the revised regulatory guidelines that require dual rating of commercial paper when the size of issue during the year is above Rs 1000 cr. This led to an increase in the number of short term instruments rated during the year. In FY17-18, CARE Ratings (Africa) Private Limited (CRAF) expanded its operations and assigned ratings to instruments in both the bond and bank facilities domain aggregating to around MUR 20.0 billion (Mur 9.0 billion in FY17). In October 2017, Bank of Mauritius has published the revised guidelines on The Recognition and Use of External Credit Assessment mapping of CRAF's Ratings has been included in the Guideline. CARE Ratings Nepal Limited (CRNL) is incorporated in Kathmandu, Nepal and is the second credit rating agency to be licensed by the Securities Board of Nepal w.e.f. November 16, 2017. In FY 2017-18, CARE Advisory Research and Training Limited (CART) expended its business offerings beyond TEV and now offer Valuation, Business plan preparation, financial improvement plan, bid process management, LIE services among other services. During the year, CART executed total of 76 Advisory assignments and undertook 9 industry research assignments for clients to assist them in filing Draft Red Herring Prospectus. During the year, CART conducted 13 days of executive classroom trainings on various topics which included customized training for a bank and an NBFC. On 2 February 2018, CART launched on-line Certificate Course in Credit Management (CCCM). In 2017-18, the company's IT initiatives were focused more on upgrading the existing IT infrastructure to support business growth. The company implemented Data Leakage prevention solution to ensure and fortify data security. During the year 2017-18, the company rated Partial guarantee bonds / Co-guarantee structured bonds as well as projects based on Hybrid Annuity Model in road projects. CARE completed multiple IT projects and infrastructure upgradation during the year 2017-18. During the year 2018, CARE Risk Solutions Pvt. Ltd. (100% subsidiary of CARE Ratings), a niche risk management solution provider for banking and financial institutions diversified its product offerings. The Company developed a new product IFRS-9 and Financial Reporting Automation system after surveying that this product has immense market potential. It successfully Implemented IFRS-9 in Sri Lanka and East Africa to leverage the first mover's advantage, which in turn opens up more opportunities for CRS also started incubation in certain key areas like IFRS on cloud for NBFCs and small banks, Artificial machine learning led models for risk management solutions, which enhance accuracy. CARE Ratings carried out securitization of personal loans and consumer durable loans pools of some of fintechs in FY 2018-19. This is based on its understanding of the credit assessment abilities of such platforms, the track record of the originating entities, the actual performance of the underlying loans till date, etc. The ratings volume of the Commercial paper carried out by the company during the year were Rs. 2.86 lakh crore in 2018-19. During FY 2018-19, CART executed more than 200 Advisory assignments in Advisory division. During FY 2018-19, CART undertook around 20 industry research assignments for clients to assist them in filing Draft Red Herring Prospectus in Research division. In Training Division, the company conducted 23 days of executive classroom trainings on various topics, which included customized training for clients. The Company also launched more on-line courses and now has 7 on-line courses live on its trainings portal during the year 2018-19. In FY19, CARE Training under CARE Advisory Research & Training (CART) developed and executed pilot programs such as Stressed Asset Resolution-Challenges and Opportunities, Mastering Trade Finance, ECL under IndAS, Corporate Valuation and Mergers & Acquisitions. CARE Training also executed soft skills training like Business Communication and Effective Sales Training. In FY 2019, the Company's subsidiary, Care Ratings (Africa) Private Limited (CRAF) has assigned ratings to 12 corporates of Mauritius including renowned Corporates like The Mauritius Commercial Bank Ltd. [CARE MAU AAA (IS) Stable], Bank One [CARE MAU A+ (IS) Stable], Ciel Limited [CARE MAU AA Stable], CIM Finance Ltd.[CARE MAU AA Stable], Leal & Co. Ltd. [CARE MAU A1+] and ENL Ltd. [CARE MAU A Stable]. In FY18-19, the Company assigned credit ratings to bank facilities and bond issue aggregating to around MUR 21.0 billion. There has been an increase in awareness about the concept of Credit Rating amongst Banks and Corporates and clear understanding of the benefits from such Ratings. In 2019-20, there was an industrywide reduction in the number of new clients rated. The Company focused on large and midcorporate segments including constant connect with the clients and outreach to prospects. CARE Ratings' IT initiatives were focused on upgrading the existing IT infrastructure in order to support rating operations. It upgraded the Information Security Management System (ISMS) framework and implemented the rating model application integrated with core rating application. On the side of Structured Finance, the Company added new products such as Replenishment Securitisation Structure, Covered Bonds, Pooled Loan Issuances (PLIs) and PTCs backed by corporate NCDs. We added several new clients/ issuers, all being NBFCs serving the underprivileged and providing credit-access to a deprived population in 2021. Effective May 2020, some of the products were transferred to CART in line with regulatory guidelines. Another segment of the business, MLD Valuation Services, got transferred to another subsidiary, CRSPL. During H2FY21, the RBI introduced the One Time Restructuring (OTR) scheme for corporate borrowers. Such OTR proposals required the Resolution Plan (RP) rating. The Company served the requirements of the lenders for such ratings. Further, the Company signed a Memorandum of Understanding with Tresata Inc., a global leader in AI & predictive analytics software, to join forces to launch predictive intelligence business solutions in India. In 2023, the Company was empanelled with the Association of Mutual Funds in India (AMFI) as an ESG Rating provider for asset management companies. The Company improved its ranking in the Best 100 Risk Management Providers as part of Chartis Research's RiskTech100. It completed over 91,059 rating assignments of large, medium and small companies including banks and financial services companies/ institutions covering a total debt size of Rs 1.8 Crores. The Company saw increase in securitization transactions for both Pass Through Certificate (PTC) and and Direct Assignment (DA) and with new originators entering the market. In 2025, CARE Ratings launched CareEdge Global IFSC Ltd, the first Indian credit rating agency to enter the global scale ratings space. The analytics arm of the Company, CareEdge Analytics, underwent a transformation this year, in delivering Gen-AI-powered risk intelligence solutions to banks & FIs under its proprietary platform, EdgeAvira,ai. The Company launched Sovereign Ratings methodology, making India's first CRA in the space. CARE ESG Ratings Limited has received the license from Securities and Exchange Board of India (SEBI) as a Category I ESG Rating Provider in FY 2025. It has further received the regulatory license to commence rating operations in South Africa during the year 2025.