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Rating Companies Soar After India Imposes Small Fine for Missing Default

  • Shares of Care Ratings surge 34% and of Icra 9% after penalty
  • There’s room for the stocks to rally further, analyst says
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Photographer: Vivek Prakash/Bloomberg
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Shares of rating companies that missed signs of a default that triggered India’s mini-Lehman moment are soaring after the nation’s markets regulator imposed only a small penalty.

Care Ratings Ltd. posted record gains and Icra Ltd. saw its biggest four-day advance in more than a year after the Securities and Exchange Board of India on Dec. 26 fined them 2.5 million rupees ($35,000) each on charges they overlooked facts while assessing Infrastructure Leasing & Financial Services Ltd. The probes didn’t find any malafide intent.