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MUMBAI (Reuters) - CRISIL Ltd (CRSL.NS), majority owned by S&P Global Inc, bought a 8.9 percent stake in rival CARE Ratings for 4.36 billion rupees ($67.55 million), expanding into the country's ratings business at a time of surging corporate bond issuance.
CRISIL said it bought the stake from Canara Bank Ltd (CNBK.NS). The investment comes as corporate bond issuance done through private placements jumped 42.9 percent to 7 trillion rupees in the year ended in March from the previous year.
The company said India's ratings sector would continue to benefit from increased issuances of bonds and loans because of rising capital investments and infrastructure financing.
"This stake purchase is an investment in the excellent long term prospects of the credit rating sector in the country," CRISIL said in a statement.
CARE is the only of India's four major ratings agencies to be independently owned, with no affiliation to S&P, Moody's Investor Service, or Fitch Ratings.
Although rating agencies have benefitted from corporate bond issuances, the sector is also facing increased scrutiny from market regulator Securities and Exchange Board of India over concerns they took belated action in a slew of recent corporate bond defaults.
($1 = 64.5475 Indian rupees)
Reporting by Suvashree Dey Choudhury; Editing by Rafael Nam