We met the management of CARE to further comprehend its business positioning in the rating industry and general outlook for the industry. Incorporated in 1993, CARE has steadily gained pace in the past six years to become the second largest rating player in India after Crisil. Currently, among top three rating agencies, CARE is a pure play on the rating business as almost its entire revenues are earned from rating functions. The company is promoted by domestic financial institutions including IDBI, Canara Bank and SBI unlike Crisil and ICRA, which have foreign parents in S&P and Moody’s, respectively. The business model of CARE is asset light in nature and generates operating cash flow of ~Rs. 100 crore in a year. As anticipated, with cash of ~Rs. 500 crore as on Q1FY15, CARE announced an interim dividend of | 65/share that was well received by investors while efficient cash utilisation is boosting its low payout ratio.