The Board of Directors of CRISIL Limited ("Company") at its meeting held today has approved the incorporation of a step down subsidiary by CRISIL Ratings Limited, an existing wholly owned subsidiary of the Company, to carry out the business of ESG Ratings Provider (ERP) and transfer of ESG Scores business of the Company as a going concern on a slump sale basis, to the aforesaid step down subsidiary, by way of Business Transfer Agreement (BTA).
The name of the step down wholly owned subsidiary ("NewCo") proposed to be incorporated is "CRISIL ESG Ratings & Analytics Limited" or any other name as may be approved by the relevant statutory authorities.
The proposed NewCo would require approvals from Securities & Exchange Board of India (SEBI) and other relevant statutory/regulatory authorities as applicable. The commencement of ERP business is subject to receipt of SEBI approval.
SEBI vide its notification dated July 5, 2023 notified SEBI (Credit Rating Agencies) (Amendment) Regulations, 2023 introducing a new chapter on ESG Rating Providers (ERP) which contemplated obtaining a separate certificate of registration for providing services in the area of ESG Ratings. Pursuant to, and in order to comply with the requirement of the said notification, the Board of Directors of the Company at its meeting held today has approved transfer of the Company's existing ESG Scores business to a step-down subsidiary to be incorporated (NewCo) by CRISIL Ratings Limited, CRISIL's existing wholly owned subsidiary, for pursuing ESG Rating Provider business. This is subject to receipt of SEBI approval for commencing the ERP business by the NewCo.
CRISIL is India's foremost provider of ratings, data, research, analytics and solutions.
The ESG Scores business, which is proposed to be transferred to the proposed NewCo, is one of the businesses of CRISIL and is the business that is permitted under the regulation. The parent entity will continue to exist and operate its other businesses.
The ESG Scores business being in its initial phase has seen significant upfront investment in building a strong team to establish ESG assessment framework, ensure smooth ramp up of coverage, support wide customer reach together with investments in technology and other systems and processes. The initial investments and the nascent stage of ESG score business in the country, has resulted in subdued profitability for this business.
Shares of CRISIL Limited was last trading in BSE at Rs. 3851.85 as compared to the previous close of Rs. 3921.00. The total number of shares traded during the day was 1456 in over 358 trades.
The stock hit an intraday high of Rs. 3926.50 and intraday low of 3816.45. The net turnover during the day was Rs. 5634068.00.