Securitisation Volumes Surge 17% Despite Market Challenges

Securitisation volumes in India rose by 17% to Rs 45,000 crore in Q1 of the fiscal year, despite the exit of a major housing finance company. The rise is attributed to an increase in the number of lenders and a substantial push from banks, especially in vehicle and personal loan securitisation.

Securitisation volumes in India experienced a notable 17% increase to Rs 45,000 crore for the April-June quarter of this fiscal, as per a report released on Monday by Crisil, a domestic rating agency.

This growth occurred despite the exit of a significant housing finance company, which had previously been asked by the RBI to halt several activities including securitisation.

The report highlighted a rise in the number of lenders in the market, with 95 originators including NBFCs and banks contributing to this surge, compared to 80 in the previous fiscal. Banks, in particular, ramped up their involvement, with transaction volumes hitting Rs 8,500 crore in Q1 alone.

Ajit Velonie, Crisil's senior director, noted that the need for NBFCs to diversify their funding sources beyond bank loans, due to higher risk weights on credit exposure, has driven this trend.

In terms of asset classes, vehicle loan securitisation surged to 41%, while mortgage-backed securitisation and gold loan securitisation saw a decline. Microfinance, personal loans, and business loan securitisation also contributed to the growth.

(With inputs from agencies.)