Credit Information Bureau (India) Ltd. (CIBIL), started its operations in India in FY01 and has now become India’s largest credit bureau company with a whopping 90% market share. It’s on a high growth trajectory - FY14 revenues have witnessed a YoY growth of 27% to Rs. 180 crores while profits grew by 34% to ~Rs. 60 crores (Source: Registrar of Companies) translating to a profit margin of ~33%.

The Credit Bureau landscape across the world is either a monopoly or duopoly business. Its very nature of its business is responsible for this - the credit bureau with the largest market share will have the best database of customers, which in turn will improve the accuracy of data provided and hence attract more financial institutions as its customers. More customers will further improve the quality of database and the loop continues. CIBIL has won this virtuous cycle and acquired monopoly status in India.

Though it is not listed currently, its business prospects have attracted several Private Equity investors. Trans Union International is the largest shareholder with a 55% stake in CIBIL. While we are not aware of CIBIL's listing plans, it should happen at premium valuations, thanks to above discussed aspects of its business.

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