Top 3 Credit Rating Stocks: How Ratings Impact Stock Prices?

By Oscarjack 4 Min Read

Introduction

Credit rating agencies give ratings to companies based on their past performance, fundamentals, and future prospects. In India, there are only a few reputed credit rating agencies which meanscredit rating stocks can be a valuable hold to leverage the potential of the rating industry. In this article, we will cover in detail about credit rating agencies and top credit rating stocks.

What is a Credit Rating Agency?

Credit rating agencies evaluate and give credit ratings to organizations, individuals, small and large businesses and NGOs. There are a number of criteria which they take into consideration while giving credit ratings. This includes financial statements, type of debt and amount, borrowing history etc.

The credit rating agency also helps lenders and investors to make lending and investing decisions. The better the rating, the less the risk of default to borrowers. This rating helps companies and individuals to get finance quickly.

Top 3 Credit Rating Stocks?

Here are the top 3 credit rating stocks you can watch in 2024.

1.     CRISIL Ltd

CRISIL is an analytics company with headquarters in India. The company is into three major segments: Research, Ratings and Advisory. Under the rating segment, they offer credit rating and credit analysis services.

CRISIL Ratings is a subsidiary of CRISIL and was started in the year 1987. CRISIL has been awarded as one of the “Best Organisations for Women 2023” by the Economic Times.

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CRISIL Share Price as of Feb 2024: ₹4147.60 +

Market Cap: ₹29,883.40 Cr

2.     CARE Ratings Ltd

CARE Ratings Ltd is another one of the leading credit rating companies. The company assesses various industries like infrastructure, manufacturing, finance etc. The credit ratings are provided by CARE on debt, loans, securitization etc.

CARE Ratings Ltd was started in 1993. The company has a deep understanding of various sectors and hence provides insightful reports on various industries and economies.

CARE Ratings Share Price as of Feb 2024: ₹1446.35 +

Market Cap: ₹3420.00 Cr

3.     ICRA Ltd

ICRA came into existence in the year 1991 and is a full-service credit rating agency. The company rates debt instruments which are issued by various entities like banks, financial institutions etc.

The company has offices in various cities like New Delhi, Mumbai, Kolkata, Ahmedabad, Bengaluru, Gurugram, Chennai, Pune and Hyderabad.

ICRA LTD Share Price as of Feb 2024: ₹5477.75 +

Market Cap: ₹5286.00 Cr

How do Ratings impact stock prices?

Stock prices react when credit rating companies announce their ratings about a company. Higher ratings mean the company is stable and reliable. This results in high movement in the stock and it increases its price.

On the other hand, when a rating agency downgrades any company, it means the company carries some risk. Due to this, investors may lose interest in the company and start selling the stock. This results in a reduction in the stock price of the company.

Conclusion

Credit Rating agencies help a lot in analysing companies and determining the creditworthiness of a company. These companies’ stock has good potential for the long term. In this blog, we have listed the top 3 rating agency stocks for you. You can research a

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bit on it if you are planning to invest in credit rating stocks.

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