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Infomerics Valuation and Rating Pays Rs65.25 Lakh To Settle SEBI Proceedings over Non-compliance with CRA Regulations
Moneylife Digital Team 13 November 2025
Investor Interest
Infomerics Valuation and Rating Pvt Ltd, a SEBI-registered credit rating agency (CRA), has paid Rs65.25 lakh to settle regulatory proceedings initiated by market regulator Securities and Exchange Board of India (SEBI). The settlement follows SEBI's findings of several lapses and non-compliances with the provisions of the SEBI (Credit Rating Agencies) Regulations, 1999, and related circulars.
 
A joint inspection by SEBI and the Reserve Bank of India (RBI) was conducted at Infomerics Valuation and Rating's corporate office in New Delhi between 21 March and 28 March 2022. The inspection covered the period from 31 January 2021 to 31 December 2021, to verify the company’s compliance with CRA Regulations. Following the inspection and CRA responses, SEBI observed irregularities in the rating agency’s processes, governance and internal controls.
 
The show-cause notice (SCN) issued to the CRA on 11 October 2023, alleged that the company had used incorrect and manipulated rating models which distorted credit ratings. It was also found to have tampered with parameter weights in models, applied the maker-checker system inconsistently and exhibited weak internal controls.
 
SEBI further noted data entry errors, incorrect scoring and arbitrary deactivation of certain parameters which compromised the integrity and objectivity of the ratings issued. Additionally, the agency was accused of failing to segregate non-rating activities from rating functions, violating the core principles of independence and objectivity required of a credit rating agency.
 
Pending the conclusion of the inquiry, Infomerics Valuation and Rating filed a settlement application under the SEBI (Settlement Proceedings) Regulations, 2018, seeking to resolve the matter without admission or denial of findings. SEBI internal committee(IC) deliberated on the case and proposed a monetary settlement amount of Rs65.25 lakh, along with certain non-monetary obligations designed to strengthen the company’s operational and compliance framework.
 
As part of these non-monetary terms, Infomerics Valuation and Rating was required to appoint an external auditor with expertise in credit risk models to conduct a detailed review of its rating methodologies, documentation, input data validation, software controls and governance mechanisms. The external audit was aimed at ensuring enhanced model transparency, accuracy and oversight in the agency’s credit rating framework.
 
In addition to the audit requirement, the company was directed to organise a comprehensive training programme through an independent third-party entity for employees involved in the rating process. The training covered all aspects of rating methodologies, model application, regulatory compliance and best practices to strengthen the competence and accountability of rating professionals.
 
Infomerics Valuation and Rating, subsequently, complied with these requirements and submitted its compliance reports to SEBI by May 2025. Based on these submissions, SEBI high-powered advisory committee (HPAC), in its meeting held on 5 June 2025, recommended the acceptance of the settlement proposal. The panel of whole time members approved the recommendation on 18 August 2025 and the company remitted the settlement amount of Rs65.25 lakh on 29 August 2025.
 
Invoking its powers under Section 15JB of the SEBI Act, 1992, of the SEBI (Settlement Proceedings) Regulations, SEBI passed a settlement order disposing of the inquiry proceedings against Infomerics Valuation and Rating. 
 
However, SEBI has reserved its right to reopen the case if it is found that CRA failed to make full and true disclosures, violated undertakings, or if any discrepancies are later discovered in the settlement terms.
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