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Domestic rating agency ICRA in its latest report has said that securitisation volumes for FY23 can reach Rs 1.70 lakh crore, as against Rs 1.26 lakh crore in FY22. It said securitisation volumes are estimated to have jumped 58 per cent to Rs 1.17 lakh crore in the April-December 2022 period as compared to the same period last year. At Rs 1.17 lakh crore, the volumes are higher than the retail assets securitisation in the entire FY22, which stood at Rs 1.26 lakh crore.

According to the report, buoyancy in securitisation can be attributed to the stable macroeconomic scenario and high credit growth for non-bank lenders, adding that on a quarterly basis, Q3FY23 volumes grew slightly at 3 per cent over the preceding quarter. After a gap of two years (FY21 and FY22), the current year is witnessing a balanced trend in the securitisation market. It also noted that the volumes in all three quarters stood in the range of 30-35 per cent of the YTD (year to date) securitisation, which contrasts with the last two years when securitisation volumes were impacted in certain quarters due to the Covid-19 pandemic.

The report stated that the high credit growth has prompted non-bank finance companies and housing finance companies to return to securitisation as a tool for raising funds. Securitisation volumes have long been dominated by mortgage-backed loans, followed by vehicle loans. The trend reversed in Q3FY23 when vehicle loans, at 33 per cent of the total volumes, inched slightly ahead of mortgage loans.