ICRA

ICRA Ltd

ICRA is one of the top credit rating agencies in India, a subsidiary of Moody’s—providing ratings, research, and risk advisory. The company operates in a tightly regulated oligopoly with limited competitors (CRISIL, CARE, India Ratings), making it a high-margin, steady-earnings business.

Market Position

Credit rating businesses are inherently counter-cyclical and often reflect overall lending and economic activity. With India's rising corporate bond market, government push for transparency, and stricter compliance regimes, ICRA stands to benefit. Its revenues are annuity-like with low capital requirements.

Challenges

However, regulatory oversight and conflict-of-interest concerns (rating clients who pay you) have often raised red flags in the industry. Moreover, intense scrutiny post IL&FS and DHFL cases has pushed rating agencies to be more conservative—possibly affecting topline growth.

Investment Perspective

ICRA’s valuation remains premium due to the nature of its moat—reputation and compliance. Long-term, it’s a cash-flow rich business ideal for investors seeking consistent compounding, though growth rates may be modest.