Shares of credit rating agencies such Crisil, Credit Analysis and Research (CARE) and ICRA hogged the limelight in Friday’s trade after the Reserve Bank of India imposed a risk weightage of 150 per cent for unrated bank exposures above Rs 200 crore. According to market experts, the move will increase the use of credit rating agencies going forward.
Crisil shares rallied as much as 7 per cent on Friday. The scrip opened the day at Rs 2134.35 and has touched a high and low of Rs 2240 and Rs 2134.35, respectively, in trade so far. Benchmark BSE Sensex was trading 72.87 points down at 27763.04 (at 1.17 pm). Shares of ICRA advanced 12.84 per cent intraday after the announcement.
CARE surged as much as 8.75 per cent on Friday. The scrip opened the day at Rs 1199.90 and has touched a high and low of Rs 1,295 and Rs 1,195, respectively, in trade so far.
The central bank on Thursday also announced a package of measures for the development of fixed income and currency markets. These measures are intended to further market development, enhance participation, facilitate greater market liquidity and improve communication.
Naresh Takkar, managing director and ceo, ICRA told CNBC TV18, “From a market development point of view, I think these are very positive measures. Now a lot of large corporates would also be looking for raising money from the bond market. The fact that credit enhancement limit have been increased which is positive. The penetration is high except now there is a provision that risk weightage getting aligned. If a bank was unrated earlier, the risk weightage was only 100 per cent and now if it is unrated the risk weightage goes up to 150 per cent. There would be additional capital requirement for the bank and there may be higher incentive for them to get large exposure rated.”