Why do credit rating agencies keep missing big Indian company defaults?

India's major rating firms include Crisil, the Indian unit of S&P Global; ICRA, the local unit of Moody's Investors Service

Mounting debt failures in India have been catching rating companies off guard, underscoring continued challenges a year after the landmark failure of shadow bank IL&FS increased scrutiny of the industry.
 

Defaults at companies including Dewan Housing Finance Corp., Cox & Kings Ltd. and Altico Capital India Ltd. have occurred even as their long-term ratings indicated very low to moderate risk of non-payment.

“Raters have not been able to detect stress in time,” said Ashutosh Khajuria, chief financial officer at Federal Bank Ltd. “Cutting credit profiles after the defaults is no rocket science.”

There’s a lot at stake as India tries to navigate