CARE's chairman SH Khan said, ``The rating agency (Fitch IBCA) has expressedits desire to pick up a stake in the company. We are currently working outthe last minute modalities.''

According to Khan, the international agency will pick up around 9.8 per centstake in the company. As per Securities and Exchange Board of India (Sebi)regulation, promoters of a rating agency are not allowed to have more than10 per cent stake the firm if the latter is rating the promoters bond issue.Under the present equity pattern of the firm, IDBI holds 26 per cent,Canbank 23 per cent stake, and the Unit Trust of India 12 per cent. Theremaining 39 per cent is held by small investors.

CARE had earlier signed a memorandum of understanding (MoU) with Fitch IBCAfor technical collaboration. As per the terms of the MoU, the internationalrating agency will provide technical expertise on rating and CARE will helpthe firm to rope in corporate clients and market its products within thecountry. "It is a win-win situation for both of us as we will be able toglobally expand our business and help Fitch IBCA to establish itself in thedomestic market. Through the association with the international ratinggiant, we will also provide services to corporates planning to raise fundsfrom the international market," Khan said.

Fitch IBCA, is a Europe-based rating firm specialises in rating banks andstructured instruments. In 1997, Fitch Investors of New York merged withIBCA of London.

CARE is also considering floating a separate subsidiary to offer advisoryservices. "There is a huge market for advisory services in the country andwe want to tap this market," Khan said.

Due to a slowdown in industrial growth, all domestic rating agencies havewitnessed lowered business volume in the current fiscal. "We have witnesseda fall in our business volume in the past six months," Khan said.

CARE has also received a certificate of registration from Sebi to operate asa credit rating agency (CRA). The move follows regulations issued by thecapital market watchdog on July 1999 which required all existing and newcredit rating agencies to obtain Sebi certification to carry out ratingactivity.