The owner of Standard & Poor's rating service, McGraw Hill Financial Inc, has offered US$334 million to increase its shareholdings in Crisil Ltd, the Indian credit rating agency. The increase would come to an exposure of 75% in the Indian firm, causing shares to zoom upwards to its highest levels in the last eight years.
The grading agency based out of Mumbai's shares jumped 20% to a record of INR1,129.9. This is the biggest one day gain for the company since February 2005. The purchase would entail transfer of 15.67 million shares in Crisil worth INR1,210 or US$21.37 per share. This is about 29% higher than its closing value last May 31, according to a company statement distributed through PRNewswire.
Crisil's nearest competitor is ICRA Ltd, where rival Moody's Corp has a 28.5% shareholdings. The two firms provide ratings to lenders and borrowers in the third biggest economy in Asia. According to McGraw Hill, the revenue generated by Crisil has increased on the average 19.3% per year in the last five years.
McGraw Hill is planning to retain Crisil as a 'listed, public, independent company'. This was reiterated by CEO Harold "Terry" McGraw III. He said the offer "represents a vote of confidence in the growth prospects of India and the other markets that Crisil serves."
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