Credit rating agency CARE has entered into an agreement with investment platform GREX to assess and grade startups & SMEs registered with the latter. The move is expected to benefit corporates and lenders who shy away from investing in startups due to weak disclosures and lack of information about these companies.
There are nearly 400 companies registered with GREX, out of which 12 are expected to soon go live on its platform.
“The grading/rating would be done keeping in mind the expectations of various market participants and nuances of the high growth companies in consideration” D. R. Dogra, Managing Director & CEO, CARE Ratings said. “We will see to it that we do rigorous due diligence and then only give a rating to a company.”
The tie up will provide a broad analytical framework within which CARE Ratings will conduct its rating exercise. The information may be useful for investors to ascertain the attractiveness of a specific company and its potential risk.
“Since inception, GREX has been striving to address challenges of credit-worthiness and poor perception of unlisted companies. This association aims to bring a huge amount of objectivity and investments in private companies.” Said Manish Kumar, Co- Founder & CEO, GREX. “There was a lot of chaos in the system as everyone was trying to do everything. We are creating a new ecosystem for investors to know more about these companies.”
India, which is home to at least 3,100 start-ups, is ranked fifth globally in terms of the combined size of the start-up industry. India trails behind the US, Europe, Canada and China in the space.
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