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First Indian Rating Agency to Enter Europe - ICRA

July 2004

ICRA Limited has emerged as the first Indian credit rating agency to enter the European market following the signing of a Memorandum of Understanding (MoU) between ICRA and Bulgarian Credit Rating Agency (BCRA). The MoU envisages, among other things, ICRA providing technical assistance to BCRA in designing rating methodologies, besides imparting training to BCRA analysts and helping them carry out rating assignments.

According to ICRAs Managing Director, Mr. P.K. Choudhury: The entry into Bulgaria underscores ICRAs initiatives towards lending its proven expertise to rating entities beyond India. The MoU with BCRA is important not only because it marks our entry into Europe, but also because it highlights the growing international acceptance of the expertise that our country has built up in the area of credit rating within the relatively short span of 14 years or so.

For BCRA, the MoU with ICRA is a critical step in the direction of institutionalising the system of credit rating in Bulgaria. Says Sonya Sofronova, Executive Director, BCRA: We propose to use ICRAs expertise in establishing a firm base for the system of credit rating in our country. Through credit rating, we want to assist Bulgarian companies find new opportunities of financing and market expansion. Besides, BCRA has set for itself the target of becoming a leader in providing correct and unbiased assessment of Bulgarian companies creditworthiness and the MoU with ICRA is a move towards this goal.

For ICRA, the MoU with BCRA marks yet another step by the Indian agency to go beyond national borders. Already, ICRA has helped in the establishment of a credit rating agency in Kuwait and also signed a MoU in another country in West Asia, even as similar moves are being made in certain other Asian and European countries. Before singing the MoU with BCRA, ICRA entered into a Technical Collaboration Agreement (TCA) with the Credit Rating Agency of Bangladesh (CRAB), and is already assisting CRAB develop rating methodologies and design advisory and information services products, among other things.

ICRAs footprints beyond Indian shores underscore the increasing global acceptance of an agency that is already a leading provider of credit rating, advisory and investment information services in India. Till date, ICRA has completed over 3,700 assignments, including credit ratings, equity gradings, customised research and need-based advisory services.

These apart, ICRA has been at the forefront of innovation, developing new concepts and products in a dynamic market environment. ICRA, with its over 130 analysts spread across eight locations, has initiated the concept of Corporate Governance Ratings in India and is the second rating agency in the world to have done so. Besides, it has pioneered methodologies for the grading of Construction Entities, Real Estate Developers & Projects, and Healthcare entities in the country.

In fact, ICRAs expertise in Grading Construction Entities and Real Estate Developers & Projects is of particular relevance for BCRA, given the increasing importance of the construction industry in Bulgaria following the country’s shift to market economy, with focus on the urban and industrial sectors.