General Nature of Compensation Arrangements with Rated Entities

Last Reviewed On: December 30, 2016

In case of rating of public debt issues, and bank facilities or commercial papers, the fee is paid by the issuer/borrower. The borrower/issuer has to pay initial rating fee along with the signed rating agreement for the rating exercise. On acceptance of the rating, the borrower/issuer has to pay an annual surveillance fee every year till the debt is fully repaid. In case, the quantum of debt increases under the same borrowing program, the borrower/issuer has to pay an additional initial rating fee and additional annual surveillance fee for the incremental borrowing.

Acuité begins a rating process (management interaction, rating analysis and rating committee) only after receipt of signed rating agreement and full payment of initial rating fee from the rated entity. Acuité has internal guidelines on fee structure for NCDs, Bonds, CP programs, and Bank Loan Ratings. The fee payable is largely dependent on the quantum of the debt being rated and to some extent on the complexity involved in the rating analysis. Acuité reserves the right to modify its fee structure.

Acuité and its employees do not accept cash payments for any reason whatsoever.

Acuité’s rating fee is not linked to the rating outcome or rating revisions or releases in any manner.

The rating is carried out by a separate team of personnel comprising analysts who are not in any way involved in business development and procurement. The compensation paid to members of the rating analytical team is not dependent on the rating outcome or rating fee received from the rated entities. This ensures that business pressures do not, in any manner, influence the teams involved in assigning the rating. Rating mandates are not solicited by promising specific ratings to issuers.

Acuité’s dissemination of credit rating of NCDs, Bonds, CP programs, and Bank Loan Ratings are accessible free of charge on its website,

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Our exciting journey started in 2005 with rating of bank borrowers most of whom were small and medium enterprises. At that time, credit rating was a concept known only to large issuers of capital market instruments. Since then, like a caterpillar transforms itself into a beautiful butterfly, we transformed to rate bonds, bank facilities of large corporates and issuers across industries. Along came many achievements - SEBI Registration in 2011, RBI accreditation in 2012, 50,000 ratings in 2018, 5,000 Bond and Bank Loan Ratings in 2017, launch of India's first Android and iPhone app to disseminate rating, tamper-proof QR-code-enabled rating rationales, and SMERA Terminal to name a few.

Now is the time to re-emphasize our increasing footprint across all segments of ratings through the launch of our new name - 'Acuité'.

The name has changed. The spirit of upholding highest standards of analytical rigour, continuous improvement, excellence in our processes and quest for innovation remains the same. We would like to re-emphasize that we will continue to work hard to provide independent, unbiased and timely opinion of highest standard.

Acuité means 'sharpness and clarity of thought and vision'. Let our research and ratings help you take decisions with confidence.

Sankar Chakraborti