E-Paper
S&P to bid for majority stake in CRISIL
Standard & Poor's said it would make a Rs 2.4 bn bid to acquire a majority stake in CRISIL to expand its coverage in India.
Global rating agency Standard & Poor's said it would make a Rs 2.4 billion ($54.9 million) bid to acquire a majority stake in India's CRISIL Ltd to expand its coverage of Asia's fourth-largest economy.
India has seen a strong demand for credit from companies as they expand capacity in an economy that is expected to grow by nearly seven per cent this fiscal.
Rating agency CRISIL has upgraded some 38 firms this year on the back of improved financial performance and strong earnings, and debt issuance by Indian corporates is also expected to rise in the coming months.
S&P, which owns 9.48 per cent of CRISIL, will make an open offer to buy up to 3.53 million shares at Rs 680 each -- a premium of 20 per cent over the closing price of Rs 566.90 at the Bombay Stock Exchange on Monday.
The acquisition will take S&P's holding to as much as 65 per cent.
CRISIL shares jumped the maximum permissible 20 per cent to a near five-year high of Rs 680.25 in opening deals on Tuesday.
The offer is conditional on getting at least 2.64 million shares, McGraw-Hill Companies, on behalf of its S&P's division, said in a statement issued in New York on Monday.
"A majority position will enable Standard & Poor's to integrate CRISIL more fully into our operations for the benefit of the Indian and international marketplace," S&P's president Kathleen A Corbet said in the statement.
"Should the open offer be successful, we expect CRISIL ... to become an integral part of S&P's global network and to allow for collaboration across a broad spectrum of activities," she said.
ICICI Bank Ltd, India's second-largest bank, holds 10.77 per cent of the Indian rating agency, according to data from the Bombay Stock Exchange.
ICICI Bank shares rose as much as 1.8 per cent to a record Rs 387.55 in a flat market.
"It is early for me to comment," said Mumbai broker Rakesh Jhunjhunwala, who along with his wife, own 14.3 per cent of CRISIL.
CRISIL's managing director and chief executive officer R Ravimohan said the company's board was yet to discuss the offer.
