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Ratings major Crisil pursues diversified growth

Widely known as a credit ratings agency, Mumbai-based Crisil has spent the last few years diversifying into businesses such as equity research, outsourcing and infrastructure solutions, in line with India's growth story. Sandeep Singh reports.

business Updated: Aug 23, 2010 22:44 IST
Sandeep Singh

Widely known as a credit ratings agency, Mumbai-based Crisil has spent the last few years diversifying into businesses such as equity research, outsourcing and infrastructure solutions, in line with India's growth story.

Research thrust

Crisil sees a big opportunity in equity research, as only a few companies are regularly covered in research reports. "We want to increase the number of companies on which research is available," said Kudva.

It has entered into infrastructure and policy solutions, helping the governments of 22 countries in privatising infrastructure development.

It also has a team engaged in offshoring research for overseas companies under the brand Irevna that it acquired in 2006.

From 75 per cent in 2005, the company's ratings business now accounts for only about a third of its revenues, even as its base has grown four-fold.

"We have diversified to become a global analytical platform. The reason is that our capital markets are still shallow and you cannot rely on one business completely. A diverse portfolio gives you balance," said Roopa Kudva, MD and CEO, Crisil, who has been spearheading the diversification push since 2007.

Having seen a four-fold increase in its revenue at R560 crore and an eight-fold increase in its profits at R160 crore over the past five years, Crisil is expanding even its ratings business. Instead of rating only a few big-ticket companies, it is now looking at a rating model based on high volume and low ticket size, and has seen a significant increase in ratings even as other credit rating companies have come under fire after the Lehman Brothers collapse in September 2008.

While Crisil had ratings on 450 companies till January 2008, it currently has ratings on 5,000 companies along with rating on 20,000 small and medium enterprises.

Working with the goal that- "Crisil should be present wherever a credit decision is made in India," Kudva is confident that Crisil will make the most of India's growth story.

The R4,000-crore market cap company is also eyeing global business and revenues.

"It has been a careful strategy over the last few years to have a diversified business model and as of now more than half of Crisil's revenue comes from outside India," said Kudva.