Abstract:
Credit ratings agencies play an important role in the development of capital
market in India. It protects the interest of investors by forewarning the risks
associated with the capital market instruments. In this backdrop, the present
study vigilantly analyses the investors’ perception and performance of credit
rating agencies. This study is conducted through a survey method among 400
investors. The study found that majority of the investors relatively new to the
credit rating based investments and brokers are the major source of
information for them. The study also has identified four predominant factors
of perception of investors towards credit rating agencies as rudimentary
perception on credit ratings, knowledge on rating agencies, knowledge on
rating mechanism and knowledge on utility of ratings by using factor analysis.
The study also identified factors influencing the performance of credit rating
agencies as information attainment, investment decision making, and
trustworthiness, forewarning risk and service quality.
