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Moody's enters India with 11 pc stake in ICRA

The US-based international credit rating agency Moody's Investors Services (Moody's) on Tuesday signed an agreement with the Investment Information and Credit Rating Agency of India to form a joint venture.

Moody's has also picked up a 11 per cent stake in ICRA. State Bank of India also has an identical stake in ICRA. ICRA's promoter, Industrial Finance Corporation of India, is the single largest stakeholder with a 30 per cent share. After South Korea, India is the second country where Moody's has picked up a minority stake in a developing venture.

Moody's will buy one million shares at Rs 60, at a premium of Rs 50. Consequently, ICRA's share capital will rise from Rs 78 million to Rs 88 million, the authorised capital being Rs 100 million.

ICRA chairman D N Ghosh and Moody's president John Rutherfurd Junior made the announcement at a media conference in Bombay.

Ghosh said that Moody's will have a minority stake of ten per cent in ICRA and the company's share capital would be enhanced to Rs 88 million from the existing capital of Rs 78 million.

Moody's will provide certain technical services to ICRA. The joint venture would bring to India the global expertise and research which Moody's has developed over decades.

Rutherfurd said Moody's has a worldwide commitment to bring its standards of analysis and ratings to the global capital markets. ''Our decision to enter into this agreement with ICRA is based not only on our commitment to the growth of the Indian markets, but is also based on ICRA's commitment to the financial strength of India and the role the country plays in the world's credit markets,'' he said.

ICRA was incorporated in 1991, and is one of the two largest rating agencies in India. In addition to rating services, ICRA provides information and advisory services. It has 104 analysts on its rolls.

Based in Delhi, ICRA had an additional eight branches in other major cities in India.

According to ICRA sources, the company is having business relationship with Moody's services from the last three years mainly in the area of rating education and rating-related services.

Raymong W McDaniel, managing director (international finance), Moody's, said, ''We are very optimistic about India's achievement and therefore we would like to be in India.''

Additional reportage by UNI

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