MUMBAI, May 9: It's boom time for the Indian credit rating agencies. Unbelievable but true, the volume of business handled by credit rating agencies in the last three weeks — ever since the monetary and credit policy for the first half of 1997-98 was announced — could match that of the entire 1996-97.

"We have done a phenomenal amount of business in the last few weeks after the credit policy announcement. Corporates have made a beeline to have their debt instruments rated, as they want the to take the advantage of low interest rates," Credit Rating & Information Services of India Ltd (Crisil) executive director Subodh Shah said. The scenario is identical at the Credit Analysis & Research Ltd (Care) and Icra. Even Duff & Phelps, which had recently set up shop in India, has rated five instruments over the last one month.

In an immediate reaction to the unprecedented business growth, Crisil stock has jumped about 15 per cent, over the past one month on the Bombay Stock Exchange touching a new high of Rs 286.25 on Friday, from the Rs 235 recorded on April 11.

There has been a tremendous spurt in the business of all three domestic credit rating agencies in the past three weeks. "There is particularly a demand to raise resources through commercial papers,'' said a Care official. The other instrument which is being preferred by the corporates to raise resources is medium-term non-convertible debenture.

There has been a substantial fall in the interest rate on three-month CPs from 14-15 per cent to 9-9.5 per cent after the announcement of the slack season credit policy. The one-month CP is now being issued at an interest rate of 8-9 per cent. These rates are applicable to AA and AAA rated companies.

Care has assigned a Care BBB rating to the proposed 17 per cent five-year NCD issue of Rs 100 million of International Aluminium Products Ltd.A host of other corporates including Reliance, Infrastructure Leasing and Finance Ltd (ILFS), BOC India, Dabur, Gujarat Ambuja, Electrosteel Casting, NRB Bearings, Singer Ltd and Anagram Finance Ltd, Blue Star Ltd, Singer India and NRB Bearing have got their debt instruments rated in the last few weeks. Public sector SAIL, BHEL have also got their instruments rated.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.