Ratings Sector Stocks

Ratings stocks refer to shares of companies that:

• Assess creditworthiness of corporates and financial instruments
  

• Provide research and analytics for institutional investors
  

• Offer risk assessment services essential for debt and capital markets
  

These companies play a vital role in supporting transparency, risk evaluation, and investor confidence in India's financial system.

Explore how investors typically engage with publicly listed credit rating agencies, which provide financial ratings and research services to institutions, corporates, and capital market participants. These companies may be accessed via direct equity investment or through mutual funds focused on the financial services sector.

Step 1: Open a Demat and Trading Account

Registration with a SEBI-registered stockbroker or intermediary is required to participate in equity markets. The process includes completing the KYC (Know Your Customer) procedure, linking a bank account, and activating both demat and trading accounts. These accounts are necessary for transacting in listed equity shares and ETFs.

Step 2: Identify Listed Credit Rating Agencies

Log in to your trading platform and search for rating agencies that are publicly listed.
Examples may include:

• CRISIL Ltd.
  

• ICRA Ltd.
  

• CARE Ratings

These companies offer services such as credit ratings, risk assessment, analytics, and industry research.

Step 3: Evaluate Business Model and Revenue Streams

Typical evaluation criteria include:

• Client segments served (e.g., banks, NBFCs, corporates, municipal bodies)
  

• Volume and diversity of ratings issued
  

• Revenue contribution from research and analytics services
  

• Regulatory environment and rating mandates
  

Information is generally available in investor presentations, annual reports, or SEBI disclosures.

Step 4: Investment via Direct Equity

If investing directly in a listed credit rating company:

• Broker's trading platform can be used to place a buy order (market or limit)
  

• Review key metrics like price-to-earnings ratio, dividend track record, and historical volatility
  

Ensure you are transacting during market hours and through a compliant channel.

Step 5: Explore Mutual Funds with Financial Services Exposure

For indirect access, some investors prefer mutual funds that include rating agencies under the broader financial services theme. These may include:

• Banking and financial services mutual funds
  

• Multi-cap or diversified equity funds with financial sector allocations
  

• Sector ETFs, if available

Such funds can be accessed via SEBI-registered mutual fund distributors and platforms.

Step 6: Monitor Sector Updates and Industry Demand

Credit rating agencies are typically influenced by:

• Debt market activity and NBFC issuance volumes
  

• Growth in corporate borrowing and infrastructure projects
  

• Regulatory developments affecting capital markets
  

Monitoring trends in debt issuance, industry borrowing patterns, and credit quality may offer relevant sectoral context.

This content is for informational purposes only and the same should not be construed as investment advice. Bajaj Finserv Direct Limited shall not be liable or responsible for any investment decision that you may take based on this content.