The Economic Times

Saturday, August 9, 2003

Icra to be the backoffice for Moody's EU operations

SAMIK DASGUPTA

TIMES NEWS NETWORK

NEW DELHI: International rating agency Moody's has outsourced its European
backroom mutual fund rating operations to India. The move was preceded by a
successful test run. The services will be carried out by domestic rating
agency Icra, in which Moody's has a 21.75% stake. Another strategic
investor, IFCI, hold 21% in Icra.

After finalising the outsourcing plan, both the agencies had gone through a
testing and training module to implement the outsourcing work. The
commercial run was started in July '03. PK Choudhury, managing director,
Icra confirmed the development. "The quality of Indian manpower, especially
the analytical skills that they have, has been the driver for selection of
India as the backroom operation centre," he said. Moody's had spent almost 5
months in training and trial run before kicking off the operations.

A team of 4 people have been entrusted with the monitoring work, on a
regular basis. "If the results are satisfactory, Moody's is planning to add
other countries' operations to the list," said Mr Choudhury. The biggest
operation of Moody's is in the Americas. Icra also plans to launch
co-branded mutual funds products with Moody's. This will enhance its
expansion in the mutual funds segment, where it already has a credit rating
for mutual funds. "We will be going for investment quality rating and
management quality rating of mutual funds along with the Moody's. This will
be a co-branded rating," Mr Choudhury said.

"The European experience with Moody's should give us insight into the mutual
fund industry as we track the big names in Europe. We plan to grow ourselves
with this experience in India." When asked to comment on Moody's plans to
buy out IFCI from Icra, Mr Choudhury declined to comment. "These are
shareholder issues and have no bearing on the management of the company."

Copyright © 2003 Times Internet Limited. All rights reserved.