Credit rating, financing and stock price: evidence from the Indian healthcare industry

Hospitals are the third-largest employment providing sector in India after agriculture and construction. The paper aims to know about the sources of finance for the healthcare sector and how it is affected by credit rating. In this paper, comparison made between the healthcare facilities provided by the hospitals whose instruments are rated and those with unrated instruments, also the impact on stock prices due to rating has been checked. From the study, we found that the quality of service provided and sources of finance affect the credit rating. The hospitals, having highly rated and sophisticated instruments, charge more than the average and that is not affordable by the people of low-income group. The market price of hospitals and change in rating have a positive correlation. The study is useful to the policymakers, to the hospital managements and the individuals.