Mumbai securitization volumes rose 17 per cent to Rs 45,000 crore in the April-June quarter of this fiscal compared to the year-ago period, according to a report on Monday.
The report by national ratings agency Crisil said the latest quarterly figure is in line with the exit of a large housing finance company, although it does not mention the name of the lender.
In March, the RBI asked the IIFL to end a number of activities, including securitization, which appears to have affected volume.
There was also growth in the number of lenders entering the market, where one lender pools a bunch of future receivables and sells them to others to manage their financing needs, according to the report.
It said 95 originators, including NBFCs and banks, turned to the market to diversify funding sources, compared to 80 in the previous fiscal year.
Banks were also more active in the market as originators, with transaction volumes reaching Rs 8,500 crore in Q1, up from Rs 10,000 crore for the whole of FY24.
“With banks now maintaining higher risk weights on credit exposure to NBFCs, availability of bank financing at optimal cost will be a key monitorable factor for NBFCs, making it imperative for them to diversify their further sourcing. beyond bank loans," said Crisil senior director Ajit Velonie. .
He attributed increased interest among banks, especially those in the private sector, for alternative sources of financing amid high credit-deposit ratios.
From an asset class perspective, the share of vehicle loan securitization, including commercial vehicles and two-wheelers, in the overall volume in the first quarter, increased 4 percentage points year-on-year to 41 percent, with continued credit growth momentum among top NBFC originators.
The proportion of mortgage-backed securitizations fell 9 percentage points to 25 percent, in line with the exit of the housing finance company, and regulatory measures on the securitization of gold loans led to its proportion falling to levels insignificant compared to 7 percent in the first quarter of last year. prosecutor, the agency said.
Microfinance accounted for 14 percent versus 10 percent, personal loans 11 percent and commercial loan securitization volumes accounted for 9 percent of the total, he said.
Among the two securitization routes, transfer certificate(s) accounted for a larger share of 53 per cent, while the rest were direct assignments (DA).
Banks were the largest investors and accounted for 90 percent of the total pie.
Among notable transactions, the agency highlighted large allocations made by a private sector bank, saying they helped offset the expected impact on mortgage DA volume due to the exit of a large housing finance company.
Additionally, bonds originated by another private sector bank supported the increase in the share of personal loan securitization in the market by 7 percentage points, he said.
The report by national ratings agency Crisil said the latest quarterly figure is in line with the exit of a large housing finance company, although it does not mention the name of the lender.
In March, the RBI asked the IIFL to end a number of activities, including securitization, which appears to have affected volume.
There was also growth in the number of lenders entering the market, where one lender pools a bunch of future receivables and sells them to others to manage their financing needs, according to the report.
It said 95 originators, including NBFCs and banks, turned to the market to diversify funding sources, compared to 80 in the previous fiscal year.
Banks were also more active in the market as originators, with transaction volumes reaching Rs 8,500 crore in Q1, up from Rs 10,000 crore for the whole of FY24.
“With banks now maintaining higher risk weights on credit exposure to NBFCs, availability of bank financing at optimal cost will be a key monitorable factor for NBFCs, making it imperative for them to diversify their further sourcing. beyond bank loans," said Crisil senior director Ajit Velonie. .
He attributed increased interest among banks, especially those in the private sector, for alternative sources of financing amid high credit-deposit ratios.
From an asset class perspective, the share of vehicle loan securitization, including commercial vehicles and two-wheelers, in the overall volume in the first quarter, increased 4 percentage points year-on-year to 41 percent, with continued credit growth momentum among top NBFC originators.
The proportion of mortgage-backed securitizations fell 9 percentage points to 25 percent, in line with the exit of the housing finance company, and regulatory measures on the securitization of gold loans led to its proportion falling to levels insignificant compared to 7 percent in the first quarter of last year. prosecutor, the agency said.
Microfinance accounted for 14 percent versus 10 percent, personal loans 11 percent and commercial loan securitization volumes accounted for 9 percent of the total, he said.
Among the two securitization routes, transfer certificate(s) accounted for a larger share of 53 per cent, while the rest were direct assignments (DA).
Banks were the largest investors and accounted for 90 percent of the total pie.
Among notable transactions, the agency highlighted large allocations made by a private sector bank, saying they helped offset the expected impact on mortgage DA volume due to the exit of a large housing finance company.
Additionally, bonds originated by another private sector bank supported the increase in the share of personal loan securitization in the market by 7 percentage points, he said.
