Infomerics Valuation and Rating pays Rs 65.25 lakh to settle case with SEBI

Infomerics Valuation and Rating settles case with SEBI with Rs 65.25 Lakh

The Securities and Exchange Board of India (SEBI) has accepted and approved the settlement application of Infomerics Valuation and Rating, a SEBI-registered credit rating agency, for alleged lapses in the use and governance of its rating models.

Following inspection covering the period from January to December 2021, multiple non-compliances were alleged in Show Cause Notice. Like failure to use correct Rating Models, thus, distorting the credit ratings issued, manipulation and tampering with weights in the Rating Models thus inflating the final model ratings and also inconsistent application of the maker-checker system, showing poor internal controls and lack of due diligence.

Additionally, failure to use of correct scoring and data entry errors indicating a lack of quality control and compromised the objectivity of ratings, arbitrary deactivation of certain parameters thus affecting the rating integrity by manipulating of the rating framework and failure to segregate the Non-Rating Activities.

Pending adjudication, Infomerics filed a settlement application under SEBI’s Settlement Proceedings Regulations, proposing to resolve the matter without admission or denial of findings.

As part of the approved settlement, Infomerics agreed to pay Rs 65.25 lakh and implement non-monetary corrective measures, including, appointment of an external auditor to review and certify its credit rating models, and conducting independent training for employees on rating methodology and regulatory compliance.

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Infomerics was directed by SEBI to appoint an external auditor to conduct an independent audit of its credit rating models, covering model documentation, data validation, software controls, governance, and independent testing. The auditor was required to submit a compliance report within three months confirming adherence to these standards.

Additionally, Infomerics was asked to engage an independent third-party to conduct a comprehensive training programme for its rating analysts on methodologies, model application, and regulatory compliance. The training entity was to issue a completion certificate within three months.

Infomerics later submitted compliance reports on January 31 and May 7, 2025, confirming fulfilment of these obligations. SEBI found the company compliant with all non-monetary settlement conditions.

The High-Powered Advisory Committee (HPAC) approved the terms in June 2025, followed by SEBI’s Whole Time Members in August 2025. The company completed payment on August 29, 2025 stated the settlement order passed by Sudeep Mishra, Designated Authority under Settlement Regulation.

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