CareEdge Group

CareEdge Group was established in 1993 as Credit Analysis and Research Limited.{{cite web |title=CARE Ratings Ltd. Company History and Annual Growth Details |url=https://www.goodreturns.in/company/care-ratings/history.html |website=Goodreturns |access-date=23 March 2025}} It had its Initial Public Offering in December 2012.{{cite web |title=Credit Analysis & Research Ltd IPO (CARE IPO) Detail |url=https://www.chittorgarh.com/ipo/care_ipo/358/ |website=Chittorgarh |access-date=23 March 2025}} The company established international subsidiaries in Mauritius in 2015,{{cite web |title=CARE Ratings Ltd Company Summary |url=https://www.indiainfoline.com/company/care-ratings-ltd/summary |website=IIFL |access-date=30 March 2025}} Nepal in 2017,{{cite web |title=About Us |url=https://www.careratingsnepal.com/about-us |website=CareEdge Ratings Nepal |publisher=CareEdge Ratings |access-date=30 March 2025}} and South Africa in 2023,{{cite web |title=Incorporation of step-down subsidiary of the Company |url=https://nsearchives.nseindia.com/corporate/CARERATING_26102023190627_CARE.pdf |publisher=The National Stock Exchange of India |access-date=30 March 2025}} to offer ratings and advisory services in those regions.{{cite web |last1=Ghosh |first1=Shayan |last2=John |first2=Satish |title=How a domestic rating agency wants to take on the big guns |url=https://www.livemint.com/companies/news/how-a-domestic-rating-agency-wants-to-take-on-the-big-guns-11712143176821.html |website=Mint |access-date=23 March 2025}}

In 2024, CareEdge published its sovereign rating methodology to assess the creditworthiness of sovereign debt issuers globally.{{cite news |title=CareEdge Ratings to assess credit profile of sovereign debt issuers |url=https://www.thehindubusinessline.com/money-and-banking/careedge-ratings-to-assess-credit-profile-of-sovereign-debt-issuers/article67792297.ece |agency=The Hindu Business Line}} In 2024 the African Peer Review Mechanism and Care Ratings (Africa) signed a Memorandum of Understanding to collaborate in developing credit rating standards for Africa.{{cite web |title=The APRM and CARE Ratings (Africa) Signed a Memorandum of Understanding for Credit Rating Collaboration |url=https://aprm.au.int/en/news/press-releases/2024-05-03/aprm-and-care-ratings-africa-signed-memorandum-understanding |website=African Peer Review Mechanism |date=9 March 2024 |access-date=17 June 2024}}

In 2023, V. Anantha Nageswaran, Chief Economic Advisor to the Government of India, published a paper suggesting reforms to the methodologies used by global credit rating agencies, indicating potential bias against developing countries.{{Cite web |date=2023-12-22 |title=India's chief economic advisor questions Fitch, S&P and Moody's rating metrics - CNBC TV18 |url=https://www.cnbctv18.com/economy/india-chief-economic-advisor-questions-fitch-sp-and-moodys-rating-metrics-18627971.htm |access-date=2025-04-01 |website=CNBCTV18 |language=en}} In the paper, Nageswaran, along with his co-author, Rajiv Mishra stated that, the global ratings agencies risked "sowing suspicion about discriminatory intent".{{Cite web |date=2023-12-22 |title=India's economic adviser calls for review of sovereign ratings methods |url=https://theprint.in/economy/indias-economic-adviser-calls-for-review-of-sovereign-ratings-methods/1896718/ |access-date=2024-09-30 |website=ThePrint |language=en-US}} The paper went on to say that "developing countries have seen over 95% of all downgrades despite experiencing milder economic contractions than their advanced economy counterparts."{{cite news |title=India's economic adviser calls for review of sovereign ratings methods |url=https://www.reuters.com/world/india/indias-economic-adviser-calls-review-sovereign-ratings-methods-2023-12-22/ |access-date=25 June 2024 |work=Reuters |date=22 December 2023}}

CareEdge Group was one of the credit rating agencies responsible for rating Infrastructure Leasing & Financial Services (IL&FS) and its subsidiaries. CareEdge, along with ICRA Limited and other rating agencies, continued to assign high ratings to IL&FS group entities despite being aware of their deteriorating financial condition. This resulted in a delay in downgrading IL&FS's debt instruments until after defaults had already begun.{{Cite web |last=Roy |first=Abhirum |date=21 July 2019 |title=Rating agencies knew of stress at IL&FS, but gave good ratings: audit |website=Reuters |url=https://www.reuters.com/article/idUSKCN1UG078/ |archive-date= |access-date=17 Sep 2024}}

Regulators and media scrutinized the role of CareEdge Group during the IL&FS crisis. An audit by Grant Thornton found that IL&FS management interfered with the credit rating process, exerting pressure on CareEdge and other agencies to assign or maintain favorable ratings.

{{Cite web |date=2019-07-20 |title=Rating agencies knew of stress at IL&FS, but gave good ratings: audit |url=https://finance.yahoo.com/news/rating-agencies-knew-stress-il-105454678.html?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAAIcW0cAdJNJJvnBBnU3v5wwUUZ50ywOSOD2yNgU-WJYFWJ8mm3h-cP57sdLKyFk_AoCGyT5m9Sn-tFUnzdgXtRYmzr8FVDXIrVSB1Q6-G_zwDuuQ9OXBvRU1cd3tlCaNUXerowSXaVrxIMEIcGP2TW-TQrzc60LWUIMMfFlfGk_q |access-date=2024-09-30 |website=Yahoo Finance |language=en-US}}{{Cite news |date=2019-07-22 |title=Icra, Care question Grant Thornton's report on IL&FS |url=https://economictimes.indiatimes.com/industry/services/consultancy-/-audit/icra-care-question-grant-thorntons-report-on-ilfs/articleshow/70333658.cms?from=mdr |access-date=2024-09-30 |work=The Economic Times |issn=0013-0389}} This interference included providing incomplete or incorrect information to avoid downgrades.

As a result, the Securities and Exchange Board of India (SEBI) imposed penalties on CareEdge and ICRA for lapses in their rating process related to IL&FS.{{Cite web |last=Upadhyay |first=Jayshree |date=26 Dec 2019 |title=Sebi penalizes rating agencies over lapses in IL&FS |url=https://www.livemint.com/news/india/sebi-penalises-care-and-icra-on-lapses-in-rating-il-fs-11577373033951.html |access-date=17 September 2024 |website=Mint}}

Analysts and regulators, including SEBI, identified shortcomings in credit rating methodologies and oversight mechanisms following the IL&FS crisis.{{Cite web |last=CBCL |date=2023-09-21 |title=Navigating the Efficacy of Post-Crisis Legal Reforms of The IL&FC Crises In India |url=https://cbcl.nliu.ac.in/insolvency-law/navigating-the-efficacy-of-post-crisis-legal-reforms-of-the-ilfc-crises-in-india/#:~:text=Effect%20of%20the%20Crisis,are%20primary%20borrowers%20from%20banks. |access-date=2024-09-30 |website=NLIU CBCL |language=en-US}} As one of the rating agencies involved, CareEdge Group faced criticism and regulatory action for its role in the crisis.{{Cite web |title=IL&FS case: Sebi raises penalty to Rs 1 crore each on ICRA, CARE |url=https://www.business-standard.com/article/companies/il-fs-case-sebi-raises-penalty-to-rs-1-cr-each-on-icra-care-120092201297_1.html |website=Business Standard}}

CareEdge, similar to other rating agencies, operates under an issuer-pays model, a system frequently criticized for potential conflicts of interest by analysts and regulators. {{Cite journal |last=Whalen |first=Patrick |date=2016-05-01 |title=The Issuer-Pays Model: "Big Four" Auditors and Credit Rating Agencies Share a Common Conflict |url=https://trace.tennessee.edu/utk_chanhonoproj/1963/ |journal=Chancellor's Honors Program Projects}} {{Cite web |last=Palepu |first=Advait Rao |date=2019-07-19 |title=Grant Thornton Report Points To Conflict Between CARE Ratings, IL&FS |url=https://www.ndtvprofit.com/business/grant-thornton-report-points-to-conflict-between-care-ratings-ilfs |access-date=2024-09-30 |website=NDTV Profit |language=en}} There have been concerns about the quality and timeliness of some of its ratings during periods of stress.

An independent enquiry into the leadership of Rajesh Mokashi who was the CEO of CareEdge during the time of the crisis revealed that there was no wrongdoing on his part.{{Cite web |last= |first= |date=12 April 2022 |title=Care Edge Ratings: Inquiry into potential misconduct by former top executives not established |url=https://www.thehindubusinessline.com/money-and-banking/care-edge-ratings-inquiry-into-potential-misconduct-by-former-top-executives-not-established/article65315074.ece |access-date=17 September 2024 |website= |publisher=BusinessLine |language=}}

Subsequent to the crisis, the company hired an outside CEO, Ajay Mahanjan to take over leadership of the business. In 2022, Mehul Pandya was internally promoted to become CEO of the group.{{Cite web |last= |first= |date=2022-04-27 |title=Ajay Mahajan exits CARE Ratings |url=https://www.thehindubusinessline.com/money-and-banking/ajay-mahajan-exits-care-ratings/article65359236.ece |access-date=2024-09-17 |website= |publisher=Businessline |language=en}}{{Cite web |date=2023-09-21 |title=Best Advice: 'Don't shy away from challenges,' says Mehul Pandya, MD and CEO of CareEdge |url=https://www.businesstoday.in/magazine/best-advice/story/best-advice-dont-shy-away-from-challenges-says-mehul-pandya-md-and-ceo-of-careedge-399219-2023-09-21 |access-date=2024-09-17 |website=Business Today |language=en}}

CARE Ratings Limited is the parent company of the CareEdge Group. It commenced operations in April 1993 and became publicly listed on 26 December 2012 on both the Bombay Stock Exchange (BSE) and the National Stock Exchange of India (NSE).{{cite web |title=About Us |url=https://www.careratings.com/AboutUs.aspx |website=CareEdge |access-date=1 April 2025}}

As of June 2024, CARE Ratings Limited operates several subsidiaries across analytics, ESG assessments, and international credit rating services.{{cite web |title=Annual Report 2023–24 |url=https://www.careratings.com/Uploads/newsfiles/FinancialReports/1718377365_CARE%20Ratings%20Limited_AR_2023-24.pdf |access-date=23 March 2025 |website=CareEdge }} These include CARE Analytics & Advisory Private Ltd, a wholly owned subsidiary previously known as CARE Risk Solutions Pvt Ltd, and CARE ESG Ratings Ltd, formerly CARE Advisory Research and Training Ltd. The group also operates CareEdge Global IFSC Ltd, which is based in the International Financial Services Centre.

The company is present in Mauritius through CARE Ratings Africa Private Limited. It was licensed by the Financial Services Commission (Mauritius) in May 2015 and recognized as an External Credit Assessment Institution (ECAI) by the Bank of Mauritius in May 2016.{{cite web |title=External Credit Assessment Institutions |url=https://www.bom.mu/financial-stability/supervision/external-credit-assessment-institutions |access-date=1 April 2025 |website=Bank of Mauritius}} In South Africa, it operates CARE Ratings South Africa (Pty) Ltd. In Nepal, CARE Ratings Nepal Limited was incorporated in Kathmandu and became the second credit rating agency to be licensed by the Securities board of Nepal (SEBON) on November 16, 2017.{{Cite web |title=SEBON |url=https://www.sebon.gov.np/ |access-date=2024-06-26 |website=www.sebon.gov.np}}{{Cite web |title=Care Rating Nepal gets Sebon's nod |url=https://kathmandupost.com/money/2017/11/23/care-rating-nepal-gets-sebons-nod |access-date=2024-06-26 |website=kathmandupost.com |language=English}}{{Cite web |date=19 November 2017 |title=Care Ratings Nepal receives Operating License from SEBON |url=http://www.newbusinessage.com/Articles/view/6931 |access-date=2024-06-26 |website=www.newbusinessage.com |language=en}}

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[https://www.careratings.com/ CareEdge Group]

Category:Finance

Category:Financial services companies based in Mumbai

Category:Credit rating agencies in India

Category:1993 establishments in India

Category:Financial services companies established in 1993

Category:Companies listed on the National Stock Exchange of India

Category:Companies listed on the Bombay Stock Exchange