Securitisation volumes fall to Rs 73,000 cr in H1 of FY23 compared to H2 FY22: Report

Mumbai: Securitisation volumes came down to Rs 73,000 crore in the April-September period of this financial year compared to more than Rs 83,000 crore recorded in the last six months of last fiscal, Icra Ratings said on Tuesday.

Compared to the year-ago period, when the second wave of the pandemic had impacted financial markets, the volumes were up 70 per cent. At that time, the volume stood at Rs 43,000 crore. Securitisation refers to an activity where a financier or lender transfers future receivables on a loan or a bunch of loans to others which helps with immediate liquidity requirements.

The rating agency said Rs 40,000 crore of assets were securitised in the September quarter, which is 54 per cent higher than the volumes observed in the year-ago period. It is 21 per cent higher than those in the preceding September quarter.

Icra Ratings' group head for structured finance ratings Abhishek Dafria said the performance is in line with the agency's estimate for overall securitisation to touch Rs 1.50 lakh crore in FY23.

"Favourable macroeconomic scenarios, growing fund requirements to support higher disbursements and stable collection efficiencies are some of the key reasons for the momentum," he said, adding that for many originators this route remains a key funding tool to support their growth plans.

Overall securitisation volumes remain dominated by mortgage-backed loans, which accounted for 46 per cent share, followed by vehicle loan segment at 28 per cent and Microfinance loans at 15 per cent.

Securitisation in India is carried out either through Direct Assignment (DA) transactions (bilateral assignment of pool of retail loans from one entity to another) or through the Pass-Through Certificate (PTC) route (instruments issued by bankruptcy remote trusts), the agency said.