How a domestic rating agency wants to take on the big guns
Mumbai: Homegrown Care Ratings Ltd plans to start its sovereign debt ratings service with countries in Asia and Africa, followed by Europe in the long term, a top executive said. The agency, which is creating a subsidiary in GIFT City for the purpose, will start with countries where it already has some presence, such as Nepal, Mauritius and South Africa. The board of Care Ratings last month approved setting up CareEdge Global IFSC Ltd for the purpose, managing director and group chief executive of CareEdge—a group level brand identity—Mehul Pandya said in an interview.
The company has applied to markets regulator Securities and Exchange Board of India (Sebi) for a no-objection certificate, and would later approach Gift City regulator International Financial Services Centres Authority (IFSCA). If the proposal goes through, Care Ratings will be the first Indian rating agency to rate sovereign debt, a space dominated by global companies such as S&P, Moody’s and Fitch. The ratings on sovereigns show the capability of a government to repay debt.
“This shall be a long-term project for us," said Pandya, who heads the three-decade-old company. “Current regulations do not allow us (Care Ratings) to rate any foreign currency denominated debt," said Pandya, adding the Gift City subsidiary will allow it to rate foreign debt. Pandya said the agency is fine-tuning the rating methodology, and is ready to launch once regulatory approvals are in.
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