After NBFCs, bond market woes likely to weigh on rating agencies' revenues

Non-rating segments to provide some support, says analysts; corporate bond issuance already down 30% in H1FY19

The pressure seen in the domestic bond market is unlikely to be confined to non-banking financial companies (NBFCs). Even rating agencies are likely to feel the heat of recent events due to subdued corporate bond issuance.

Already, during the first half of 2018-19, amid elevated yields, corporate bond issuance (including private placement of debt) is down 30 per cent year-on-year. Typically, when interest costs are at elevated levels, corporate borrowings get slower. This is expected to weigh on the revenue of rating agencies.
 

The three listed rating agencies – CRISIL, ICRA and CARE — could, thus, see pain in the