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ICRA Ratings in its latest report has said that despite the impact of the second wave of COVID-19, securitisation volumes by non-banking financial companies (NBFCs) and housing finance companies (HFCs) surged 2.3 times to Rs 17,500 crore of their loan assets in the first quarter of 2021-22. During the first quarter of 2020-21, the volumes had significantly fallen to Rs 7,500 crore due to the pandemic and the resultant nationwide lockdown in March 2020.

The agency expects securitisation volumes for NBFCs and HFCs in FY2022 could be more than Rs 1.2 lakh crore, of which the majority would be in H2 FY2022 if there is no resurgence of COVID infections in the country. It also said there was gradual ease in lockdowns in June across most geographies and gradual improvement in collection efficiencies of NBFCs thereby gives investors the necessary comfort to participate in securitization.

According to the report, another factor that supported the volumes was that unlike Q1 FY2021, when the microfinance sector was almost absent from the securitisation market, the segment has been able to restrict the decline in collections and thus been able to find investor interest in the securitisation of its assets.