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Just pick any prospectus of a major corporate bond issuance in India, and you will most probably come across a rating assigned by one of the four agencies: CRISIL, ICRA, CARE Ratings, and India Ratings and Research. They are all SEBI-registered, use an AAA to D rating scale, and define their ratings as reflecting creditworthiness or the likelihood of repayment of a corporate entity’s debt.
However, once you dive deeper into the methodologies used by the agencies, you can notice the differences in terms of ownership and sector specializations; the relative importance of cash flows and qualitative assessment; as well as the formatting of the rating symbol itself. CRISIL, ICRA, and CARE Ratings are subsidiaries of major international rating agencies (S&P Global, Moody’s, and Fitch, respectively), while India Ratings and Research is an independent, Indian entity. This article gives a comparative overview of the four agencies based on the methodologies used, ownership structure, notation, and the disclosure requirements set by SEBI after the default of IL&FS.
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India’s Big Four Credit Rating Agencies: Ownership & Background
Founded in 1987, CRISIL was the first credit rating agency in India and functions as a subsidiary of S&P Global with access to its globally tested rating methods. ICRA, incorporated in 1991 and listed on both NSE and BSE stock exchanges, has Moody’s Investors Service as its majority shareholder, which lends ICRA Moody’s globally recognized risk assessment methodology.
CARE Ratings, incorporated in 1993 and currently operating under the CareEdge brand, does not have a global parent company; it is an independent listed company from India. India Ratings and Research (Ind-Ra), headquartered in Mumbai, is a wholly-owned subsidiary of the Fitch Group that is recognized by SEBI and the RBI. Unlike the other three companies, India Ratings does not function as a listed company in India; it operates as a wholly owned Fitch subsidiary rather than a publicly traded entity.
Must Read – Credit Rating Agencies in India
How Credit Rating Methodology Differs Across Indian Agencies
All four evaluate similar broad pillars: industry risk, business risk, financial risk, management quality, and liquidity, but the emphasis differs:
- CRISIL: Rates debt instruments across banks, NBFCs, PSUs, manufacturers, financial institutions, and state and urban local bodies and is widely regarded as the benchmark agency for large public NCD and PSU bond issuances. Its scale and S&P-derived frameworks make it the default choice for many large, first-time issuers.
- ICRA: Has built its strongest reputation in infrastructure, financial-sector assessments, and structured obligations, where long-duration cash flow complexity requires specialist expertise. Its methodology emphasizes inherent protective factors, competitive positioning, technological development, management effectiveness, and ongoing surveillance for the life of the instrument.
- CARE Ratings: Is a significant rater for mid-market corporates and infrastructure entities, reflecting a more domestically tuned read on issuers that may get less depth of coverage elsewhere.
- India Ratings: Places particular emphasis on cash-flow measures of earnings, coverage, and leverage, using both historical numbers and its own forward-looking forecasts to assess an issuer’s debt-servicing capacity, an approach that leans more heavily on projected sustainability of cash flow than static balance-sheet snapshots. It also layers sector-specific criteria reports on top of its master corporate methodology, tailoring analysis to the fundamentals of each industry.
This is also why rating splits happen: an issuer can genuinely get AA+ from one agency and AA from another, simply because of differing sector weightings, forecast assumptions, or information access, and not because one agency is “wrong.”
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Understanding AAA to D: Rating Notation Across Agencies
The confusing part for bond investors is that all four scales mean the same thing but look different on paper.
| Agency | Notation Style | Highest Safety Example | Default Symbol |
| CRISIL | Plain letters | CRISIL AAA | CRISIL D |
| ICRA | Bracketed | [ICRA]AAA | [ICRA]D |
| CARE Ratings | Plain letters, CareEdge brand | CARE AAA | CARE D |
| India Ratings | Prefixed | IND AAA | IND D |
Although the two formats vary, all four top ratings can be considered equivalent in their meaning and signify securities with very little risk of default. The lowest rating in the investment grade for any of the three agencies is BBB minus, and anything lower than that would fall into the category of speculative and would normally not be considered by institutional investors. India Ratings specifically uses IND BBB and above as its investment-grade cutoff, consistent with the other three.
SEBI Rules for Credit Rating Agencies: 2018 to 2026 Explained
SEBI’s current disclosure framework for all four agencies has been built in layers, not introduced overnight.
The IL&FS trigger (2018): Following the IL&FS default, SEBI directed rating agencies to specifically analyze deterioration in an issuer’s liquidity conditions, factor in asset-liability mismatches, and disclose a dedicated liquidity section covering cash balances, unutilized credit lines, and liquidity coverage, along with any parent or group support an issuer relies on. This is why every rating rationale today, regardless of agency, carries an explicit liquidity discussion.
What’s new in 2025-26: In April 2025 [1], SEBI amended the CRA Regulations to introduce a subscriber-pays framework for ESG rating providers, making simultaneous report-sharing, a two-day comment window, and methodology disclosure compulsory. Then, in April 2026, SEBI clarified and expanded the framework, permitting rating agencies to rate instruments falling under other regulators like the RBI and IRDAI, while requiring clearer structural separation between SEBI-regulated and non-SEBI-regulated business lines.
India’s Corporate Bond Market Growth and What It Means for Ratings
A CareEdge Ratings report [2] from May 2026 shows India’s corporate bond market has grown from $360 billion in 2016 to $645 billion in 2025. Outstanding corporate bonds have grown at an 11.4% CAGR to reach nearly Rs 59 lakh crore, though the corporate debt-to-GDP ratio has stayed flat at 16-17%, well behind markets like China, Malaysia, and South Korea. The report also notes issuances remain concentrated, with the BFSI sector accounting for over 60% of the market and AAA/AA-rated paper commanding more than 85% share. As issuance volume climbs, the number of ratings CRISIL, ICRA, CARE, and India Ratings issue each year climbs with it, which is exactly why SEBI’s disclosure requirements have kept tightening.
Practical Takeaways for Bond Investors
- Don’t treat a lower notch from one agency as automatically “wrong”; check whether the split reflects a genuine methodology difference (e.g., ICRA’s structured-finance lens vs. India Ratings’ cash-flow-forecast lens).
- For large PSU or blue-chip NCDs, a CRISIL rating is the de facto market benchmark, but that doesn’t make it more “accurate” than an ICRA or India Ratings call on the same paper.
- Dual ratings from two different agencies are standard practice for larger bond issues, so seeing two names on one prospectus is normal, not a red flag.
- Always read the liquidity section of the rating rationale specifically; it’s the post-IL&FS addition that tells you the most about near-term repayment risk.
- Match the agency’s known sector strength to the issuer: infrastructure and structured finance paper may benefit from an ICRA or India Ratings read; mid-market and domestic-facing issuers are well covered by CARE.
Frequently Asked Questions
Credit rating agencies assess the creditworthiness of bond issuers and assign ratings that indicate the likelihood of timely repayment of interest and principal.
Broadly, yes. All four use similar letter-based rating scales (such as AAA, AA, A, BBB, etc.) for long-term debt, making ratings broadly comparable across agencies.
Although rating scales are similar, agencies may differ in their assessment of business risk, financial strength, industry outlook, management quality, or the likelihood of external support, leading to different ratings.
There is no single “best” rating agency. Each follows its own analytical methodology and is regulated by SEBI. Investors should review the rating rationale rather than relying solely on the rating symbol.
Yes. Ratings can be upgraded or downgraded if the issuer’s financial position, business prospects, or other credit factors change over time.
No. A credit rating is an important starting point, but investors should also evaluate the issuer’s financials, bond covenants, security structure, maturity, and overall risk profile.
Sources
- https://www.sebi.gov.in/legal/circulars/apr-2025/clarificatory-and-procedural-changes-to-aid-and-strengthen-esg-rating-providers-erps-_93704.html
- https://www.careratings.com/uploads/newsfiles/1779884479_Debt%20Market%20Summit%202026.pdf
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