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Rating agency ICRA in its latest report has said that securitisation volumes, originated primarily by non-banking financial companies (NBFCs) and housing finance companies (HFCs), are estimated at Rs 53,000 crore in Q1 FY24, reflecting a strong growth of 60% over the Rs 33,000 crore securitised in Q1 FY23. 

The report stated that the securitisation volumes, combining both direct assignments and pass-through certificates, have been witnessing a healthy recovery after the impact of the Covid-19 waned and had registered full-year volumes of Rs 1,80,000 crore in FY23, close to the pre-pandemic numbers. It also said historically, mortgage-backed loans accounted for the largest share of the overall securitisation volumes at 30-40%, followed by vehicle loans and microfinance loans. In Q1 FY24, mortgage-backed loans again accounted for one-third share of the total volumes. 

According to the report, HDFC, which has been the single largest originator over the last few years, continued to be the top originator in Q1 FY24. However, it said following its recently concluded merger with HDFC Bank, it is unlikely to carry out any further loan sell-down.  As a result, it noted that the share of mortgage-backed loans is expected to reduce to 20-25% of the total volumes. It added that vehicle loans are expected to become the largest asset class in the securitisation space as strong construction and mining activities would drive loan volume growth in the near term.