Can Different Rating Agencies Give Different Ratings?

Yes, and this is a normal, well-understood feature of a competitive, independent rating system, not evidence of a flaw in the process — though the degree of typical divergence, and how it is generally interpreted, is worth understanding clearly.

Confirming the Premise Directly

It is entirely possible, and reasonably common, for two SEBI-registered credit rating agencies, each independently and competently assessing the same company or instrument, to arrive at different ratings — most commonly differing by a single notch, though wider divergences do occur less frequently. This is a direct consequence of each agency conducting a genuinely independent assessment, as discussed in detail in the companion article on why this happens elsewhere in this pillar, rather than any agency simply performing its analysis incorrectly.

Why This Is a Feature, Not a Flaw, of Having Multiple Independent Agencies

A market with only a single rating agency would remove any possibility of an independent cross-check on a given assessment — genuine analytical errors, blind spots, or overly aggressive or conservative calibration by a single agency would have no counterbalancing check. Having multiple, genuinely independent agencies, each subject to the same overarching regulatory framework but conducting its own separate analysis, provides the market with a useful form of triangulation, where a broad consensus across two or more agencies carries more informational value than any single agency's view alone, and a notable divergence itself becomes a useful signal worth investigating further.

How Regulators and Sophisticated Market Participants Treat Multiple Ratings

Certain regulatory and institutional frameworks specifically account for the possibility of multiple ratings — for instance, some regulations governing what ratings certain regulated investors can rely on specify how a split rating should be treated (in some cases requiring the more conservative of two ratings to be used for specific regulatory calculations). Sophisticated institutional lenders and investors typically maintain their own internal views on how to weight or reconcile ratings from different agencies when they diverge, rather than automatically defaulting to either the higher or lower of the two without further consideration.

What a Company Should Do When Facing a Meaningful Split

•      Review both published rationales carefully to identify the specific factor or factors driving the divergence

•      Prepare a clear, honest explanation of the source of the split, ready to share proactively with lenders or investors who ask

•      Avoid the temptation to simply present only the more favourable of the two ratings in communications, since this can itself raise credibility concerns if the less favourable rating is separately discovered

•      Where the divergence appears to stem from a factual matter rather than a genuine difference in judgement, raise it directly with the agency whose assessment appears to be based on outdated or incomplete information

A Word on Persistent, Significant Divergence

While a modest, single-notch split is generally unremarkable, a persistent, significant divergence between two agencies rating the same instrument over multiple review cycles is less common and, where it does occur, is worth a company understanding in real depth, since it may point to a genuine, ongoing difference in how the two agencies view a specific, structural aspect of the company's risk profile — information that is itself useful for the company's own internal risk management, quite apart from its implications for external stakeholders.

Talk to FinMen Advisors — for help preparing for a rating exercise, write to marketing@finmen.in or call +91 77387 14680.

Disclaimer: This article is intended for general informational and educational purposes only and does not constitute financial, credit, investment, or legal advice. Credit ratings are assigned solely by SEBI-registered Credit Rating Agencies (such as CRISIL, ICRA, CARE Ratings, India Ratings, Brickwork, Acuite, and Infomerics) based on their own methodologies, policies, and the information available to them at the time of assessment. FinMen Advisors provides preparatory and advisory support to companies undergoing a rating exercise and does not issue, influence, or guarantee any rating outcome. Readers should exercise independent judgement and consult qualified professionals before making business or financial decisions.