Credit Rating Advisor vs Merchant Banker: Who Should Handle Your Rating Process?

FinMen Advisors | Credit Rating Advisory — Decision Guide

When a company decides it needs a credit rating, the question of who should run that process isn't always obvious. Many merchant banking and investment banking firms list credit rating support somewhere in their service menu, usually alongside debt syndication, IPO management, valuation, and M&A advisory. On paper, this looks convenient — one firm, many services. In practice, it's worth understanding what you're actually getting when rating advisory is a side offering rather than a core specialisation.

What a Merchant Banker Is Built to Do

Merchant bankers are, by design, generalists across capital markets activity — issue management, underwriting, corporate advisory, and regulatory compliance work tied to public offerings. Many are genuinely strong at these things. Credit rating support, where it's offered, tends to sit as an adjacent service — useful for a client that's already engaged them for a larger mandate like an NCD issuance or an IPO, less so as a standalone specialisation with its own dedicated team, methodology depth, and rating-agency relationships built over years.

What a Dedicated Rating Advisor Is Built to Do

•        Deep, current familiarity with each rating agency's specific methodology — which differs by agency and by instrument type

•        A team whose day-to-day work is exclusively financial analysis, documentation, and rating agency coordination — not split across multiple unrelated mandates

•        Sector-specific experience across a wide range of industries, built from repeated exposure to how different rating frameworks apply

•        Established working relationships with rating agency analysts, built through consistent, high-volume engagement

None of this makes a merchant banker unqualified to touch rating work. It does mean the depth of specialisation is structurally different — a firm that completes a handful of rating engagements a year alongside other mandates is not building the same pattern-recognition as one whose core practice is rating advisory.

When the Two Roles Actually Work Together

These aren't always competing options. A company raising capital through an NCD issue, for instance, may need both a merchant banker to manage the issue itself and a rating advisor to prepare the credit rating that instrument requires. In that scenario, the two roles are complementary, not interchangeable — each doing the part of the process suited to their specialisation.

Questions That Clarify Which You Need

•        Is your immediate need a standalone credit rating, or is it part of a larger capital markets transaction (IPO, NCD issue, structured finance)?

•        If a firm is offering rating advisory as one of several services, ask how many dedicated rating engagements their team has handled in the last two years — not the firm's overall client count

•        Ask which rating agencies they've worked with most recently, and in what industries

Frequently Asked Questions

Can a merchant banker do a competent job on a credit rating engagement?

Some can, particularly larger firms with a genuinely dedicated ratings team. The point isn't that it's impossible — it's that rating advisory works best as a specialised practice, and it's worth asking pointed questions about the specific team's depth before assuming a broad service menu means broad expertise.

Is it more expensive to use a specialist rating advisor separately from a merchant banker?

Not necessarily — fee structures vary by firm and scope rather than by category. It's worth comparing what's actually included in each quote rather than assuming one path is automatically cheaper.

Do rating agencies treat submissions differently based on who prepared them?

The agency's assessment is based on your company's own financials, documentation and business profile — not on who advised you. What differs is how completely and clearly that information is presented before it reaches the agency.

Talk to FinMen Advisors

If you're planning a rating exercise — standalone or as part of a larger capital raise — FinMen Advisors' team can walk you through how a dedicated rating advisory engagement would work for your situation.

FinMen Advisors Pvt. Ltd. — India's Largest Credit Rating Advisors & Leading IPO Advisors. 15+ years | 13 branches | 80+ professionals | 6,500+ client assignments across 31+ industries.

Write to marketing@finmen.in or call +91-7738714680 to book an Initial Assessment.

Note: Credit ratings are assigned solely by SEBI-registered Credit Rating Agencies (CRISIL, ICRA, CARE, India Ratings, etc.). FinMen Advisors provides preparatory and advisory support and does not issue, influence, or guarantee rating outcomes.