CareEdge group to scale up share for its non-rating business to 20%

The plan is to establish regional hubs to enhance local connections in the countries rated by CARE

CARE Ratings Ltd plans to increase share of non-rating business comprising analytics & advisory and ESG rating plus advisory stream to 20 per cent in the next three years from around 10 per cent now.

 

Mehul Pandya, Managing Director & Group CEO of CareEdge, said that the pace of growth in Environmental, Social, and Governance (ESG) business may be slower than for the analytics segment. The ratings in the ESG space are discretionary and the coverage is restricted to listed entities. When the market opens up (expands), the growth will be fast in the ESG segment, he added.

 

The agency received approval from Securities and Exchange Board of India (SEBI) to function as a Category I ESG Ratings Provider on May 2, 2024.

 

 

Pandya said the contribution of non-ratings business to total consolidated revenue from operations has improved to 9.5 per cent as of September 2024 up from 8.3 per cent a year ago. The ratings business witnessed a strong growth of 19 per cent with a share of 90.5 per share in consolidated revenue, according to an analyst presentation filed with BSE. Its consolidated revenues from operations rose by 21 per cent year-on-year (Y-o-Y) to Rs 196.29 crore at the end of first half ended September 2024.

 

Referring to sovereign rating business, he said this is a newly formed unit for global ratings and analytic business with a team of 15 professionals. At present, it has coverage (sovereign ratings) on 39 countries. These countries were selected carefully, having a blend of emerging and developed economies across continents like Asia, Africa, Europe and North and Latin America.

 

Its step-down subsidiary in South Africa has also received the regulatory approval to offer credit ratings services, including sovereign ratings in that geography.

 

The plan is to establish regional hubs to enhance local connect in country’s rated by CARE and it will add 7/8 new geographies for coverage by March 2026. Having sovereign ratings is the first step in enhancing global scale, the next step will be to reach-out to issuers and international investors in foreign currency bonds to gain acceptability, Pandya added.