Yes. PPFAS do have a small position in ICRA. I have been a unit holder of them since their inception in 2013. But when it comes to rating agencies, CARE is definitely undervalued at present. Please check my small write-up on the same on the CARE thread.
Disclosure - Invested in both CRISIL & CARE ( from 550 levels)
regards,
dr.vikas
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⢠Financial System Fragility
⢠Heightened activity in alternatives and deployment of private capital
⢠Continued spends on regulatory requirements, risk management & business transformation
⢠Increasing government capex continued to support investment drive in corporate and MSME growth.
⢠Higher corporate bond issuances, robust bank credit growth driving bank loan ratings
⢠Indian GDP expected to grow at 6% in fiscal 24 with risk tilted to the downside
⢠Growth is seen in all businesses amid global concerns.
⢠CRISILâs expertise in infrastructure consulting being leveraged in other developed nations in Asia and Africa
⢠Increased demand for indexing products and research insights that deliver alpha through digital platforms.
⢠The company focuses on de-risking its ratings business and protecting margins.
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Here is an observation about Crisilâs cyclicality. Every few years Crisilâs PE re-rates to ~57 and then reverts to mean. We could be near the top of the cycle right now.
Disclosure: I hold shares. No transactions in recent 90 days. Not a recommendation.
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Hi Paul,
Do they usually reply to such emails?
So, every time someone said that CRISIL is a good investment the sub prime crisis interviews of the US credit rating agencies came into mind - https://youtu.be/zIGThxn_eGk?t=25
And finally CRISIL and other CRAâs have done the same - Ever-Vigilant CRISIL, India Rating Downgrade Firm â After Default | Hemindra Hazari
Will anything change in the CRAâs - No. Will SEBI do anything - Well they havent done anything about Ms Puri yet.
Will the CRISIL stock return good returns, perhaps yes. See the returns of Moodyâs here Moody's Corporation (MCO) Stock Price, News, Quote & History - Yahoo Finance
Should you care about credit rating agencies - Clear no. For almost all companies the credit rating is some shade of A with a + or -
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Lol - Indusind bank was also rated A in Jul 2024 - Archived Rating Rationales
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Good points.
But I differ in the last point. Many small cap companies do have BBB+ ratings. And mind you in many of the small cap companies ( who donât do any concalls and investor presentations) , the only reliable information available for retail investors is the Credit Ratings reports by these agencies.
Was invested in CRISIL and sold with handsome gains last year.
At present invested and in 20% gains in CARE ratings.
Well. Why CARE, being a small cap and no major foreign promoter ( though CRISIL has 8% holding in CARE , only second to LIC )
Personal opinion
dr.vikas
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I feel, both points are valid. While Stock Price of any credit rating agency can move up or down as those are cyclic in nature, nothing much can be said about their ability to spot the malpractices in the companies which they rate. Their performance of judging the frauds has been nothing to speak about. None of them were able to catch the wrong practices followed by Satyam, IL&FS, or for that matter Yes Bank nor they will do in future. It is mainly due to the Conflict of Interest!! (It is practically quite difficult to tell the Student coming to your Tuition that, you are not capable of even getting 50% when his/her parents are expecting him/her to get 90%âŚ)
While an Investor can not depend on these agencies for detecting wrong doings, an Investor can still benefit from their Stocks.
I would agree with these observations.
Disclosure : No Investment in CRISIL/CARE/ICRA.
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