Standard & Poor's has taken a majority stake in India's top rating agency CRISIL Ltd, raising its presence in a fast-growing market with plans to make use of the country's cost-effective research capabilities. S&P, the world's largest credit rating agency, said on Monday it had raised its holding in CRISIL to 58.5 percent from 9.48 percent, paying $56 million for 3.12 million shares. S&P, part of McGraw-Hill Companies Inc, bought the shares for 775 rupees each in an open offer that closed April 25.
Shares in CRISIL, which rates debt and provides financial news and risk and policy advisory services, closed 1 percent higher at 811.05 rupees on the Bombay Stock Exchange. "CRISIL will become a part of S&P's Asia-Pacific network," S&P President Kathleen Corbet told a news conference.
"It will be a regional partner... for Indian ratings, regional criteria development and research, development of new products, tools, models and markets, and in some aspects, for S&P's global analytical outsourcing," she added. Corbet said CRISIL has done projects for S&P in past years.
Many global corporations, ranging from IBM to Toyota Motor Corporation, are taking advantage of India's relatively cheap but skilled workers to cut down their costs.
S&P is also eyeing India's strong demand for credit from companies as they invest in an economy expected to grow by about 7 percent in the financial year through March 2006.
Indian companies raised $5 billion in overseas debt in 2004, more than double the year before, while domestic corporate bond issues rose to 585 billion rupees from 509 billion.
"CRISIL's revenues have been growing at 25 percent a year in the past five years," CRISIL Managing Director R. Ravimohan said. "Certainly, I expect that to be maintained, if not bettered."
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