What Is an INC Rating? Issuer Not Cooperating

An INC rating is a credit rating that carries the suffix ISSUER NOT COOPERATING, meaning the rating agency is still rating the instrument but no longer receiving information from the company. It is not a grade. It is a flag on the grade, and SEBI's rules make it a flag with teeth: six months of silence forces a downgrade to non-investment grade, and twelve months of silence across every agency blocks the issuer from getting a new rating anywhere.

How does a rating become an INC rating?

The trigger is a missing monthly document. Every issuer owes each of its rating agencies a no default statement on the first working day of each month. Paragraph 11.3 of SEBI's CRA master circular sets a uniform practice across agencies: three consecutive months of non-submission, or an inability to validate timely debt servicing through other sources, is a ground for migrating the rating to INC, and the agency must tag it within 5 working days of that third month. An agency may migrate a rating sooner if its own judgement calls for it.

Non-cooperation is wider than a missing NDS. SEBI requires each agency to have a policy covering non-submission of quarterly, performance or audited financial results within prescribed timelines, current and past operational details including capex plans, and debt obligations and repayment details. Non-payment of surveillance fees also counts.

What does the tag look like on the page?

Precisely specified. Under paragraph 11.5 the credit rating symbol is accompanied by the suffix ISSUER NOT COOPERATING in the same font size, and the suffix must be explained below it, reading "Issuer did not cooperate; based on best available information". The font size rule exists so the tag cannot be shrunk into a footnote.

The rating itself does not stop. Under paragraph 11.1 the agency continues to review the security on an ongoing basis throughout its lifetime, on best available information.

The two escalations that make INC more than a label

Six months: a mandated downgrade. If an issuer has outstanding ratings as non-cooperative for more than 6 months, the agency shall downgrade the rating assigned to that issuer's securities to non-investment grade with INC status. The downgrade is driven by the silence, not by a fresh view of the credit.

Twelve months: a ratings blackout. No agency shall assign any new rating to an issuer that is categorised as non-cooperative with all the agencies for a continuous period of the preceding 12 months, until the issuer resumes cooperation or the rating is withdrawn. Agency shopping is closed off from the other side too: under paragraph 11.8, where an issuer that did not cooperate with one agency approaches another, the new agency must disclose the aspect of non-cooperation in its press release.

Where can you see the list of non-cooperative issuers?

On each rating agency's own website, updated daily. Paragraph 11.6 requires every agency to publish two lists, one for securities that are listed or proposed to be listed on a recognised stock exchange, and one for other ratings, each showing the issuer's name, the date it was categorised as non-cooperative, and a link to the webpage hosting its press releases. That disclosure requirement took effect from 15 July 2023.

SEBI notes in paragraph 11.6 that the number of non-cooperative issuers has grown, with a vast majority of INC issuers being unlisted and small entities. That is worth holding on to: an INC tag on a listed company is the less common case.

Reading an INC rating without over-reading it

An INC tag is a statement about information flow, not a verdict on solvency. A company can be paying on time and still be tagged, because the tag follows the paperwork. Equally, the tag removes the main thing a rating is supposed to give you, which is a current assessment, and after six months SEBI treats that absence as bad enough to force a non-investment grade label.

The honest read of an INC rating is: the rating on this instrument is being maintained without the issuer's cooperation, so the outlook and watch signals that normally accompany it are either absent or stale. An INC migration reaches Flock's feed only when the company itself discloses the revision to the exchange, which is why an alert on rating changes tracks disclosures rather than the agency's internal action.

Flock reports the filings themselves, each one dated and linked to its source. What a rating action means for your money is your call to make. Not investment advice.