Securitisation soars 42% to Rs 1.15 lakh crore till December quarter this fiscal; number of originators up 20% : Crisil

Driven by a 20 per cent rise in the number of originators to 120, securitisation volume jumped 42 per cent to over Rs 1.15 lakh crore in the first three quarters of the current fiscal, a report said on Monday.

Led by small finance banks, securitisation activity became broad-based and the number of originators rose to 120 from 100 last year. This has the overall volume growth crossing 42 per cent to Rs 1.15 lakh crore in the first nine months of the current fiscal, according to the data tabulated by Crisil.

Growth in the non-mortgage space was led by commercial vehicle (31 per cent) and microfinance (14 per cent) loans. Unsecured loans, including personal and business loans, also continued to draw investors' attention, comprising 7 per cent of the securitised assets compared to 3 per cent in FY22, but the share of property-backed loans declined to 38 per cent from 43 per cent in FY22.

According to Krishnan Sitaraman, a senior director and deputy chief ratings officer at the agency, the securitisation market is continuing to regain its mojo post-pandemic, propped up by a resurgence in microfinance and increasing preference among investors for vehicle loans. Additionally, personal and business loans seem to be gaining greater acceptance, bringing diversity to the bouquet of asset classes being securitised.

Direct assignment transactions accounted for 60 per cent of the quantum led by mortgage and gold loan pools. Correspondingly, the share of pass-through certificates (PTCs) was at 40 per cent, down marginally from 41 per cent.

On the investor side, foreign banks and multinational institutions (14 per cent) were more active. Private (53 per cent) and public sector (25 per cent) banks remained the largest investor groups, while the share of non-banks remained low with mutual funds also making sporadic investments. State-owned banks have invested in PTC-backed pools comprising vehicle, microfinance and unsecured business loan receivables in recent quarters.

According to Rohit Inamdar, a senior director with the agency, the current fiscal has seen an increase in securitisation volume driven by new asset classes and wider participation from investors, enticed by stable pool performance.