Securitisation loan volume surges 60% in Apr-June quarter: Crisil

he number of transactions has gone up from around 160 in the first quarter of fiscal 2023 to over 250 in the first quarter of fiscal 2024.

The total chunk of securitisation loans surged by 60 per cent in the April-June quarter, ratings agency Crisil has said in a report.

Securitisation of loans is a process through which financial institutions like banks and NBFCs combine their financial assets to form a consolidated instrument which is then issued to the investors.

According to the report, banks concluded deals of around Rs 55,000 crore, the highest ever in a quarter, which the agency attributed to strong demand for retail assets from banks coupled with increased use of securitisation as an alternative funding route by non-banking financial companies (NBFCs).

“The number of transactions has gone up from around 160 in the first quarter of fiscal 2023 to over 250 in the first quarter of fiscal 2024. Private and public sector banks continued to be the dominant investors, followed by foreign banks,” the agency added.

The share of vehicle loan securitisation in overall first-quarter volume surged 900 basis points (bps) to around 37 percent primarily driven by the top originators in the commercial vehicle segment, the report mentioned.

This rise, along with continued momentum in other asset classes, has led to a relative decline in the share of retail mortgage-backed securitisation (MBS) by 1,300 bps to around 34 percent in the first quarter, Crisil added.

The report also said that microfinance securitisation covered 10 percent and gold loans 8 percent of the market.