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ICRA Ratings in its latest report has said that total value of loan assets securitised by non-banking financial companies (NBFCs), including Housing Finance Companies (HFCs) grew by around 43 per cent to Rs 1,25,000 crore in the last fiscal year (FY22), driven by quick economic recovery and lower base effect. The amount of loans securitised by NBFCs and HFCs stood at Rs 87,300 crore in FY21. It expects the securitisation volume to touch the pre-Covid level of Rs 2 lakh crore in fiscal 2023-24.

According to the report, the growth in securitisation volumes in FY22 was on account of the lower base of FY21 and quick recovery in economic activities following the second pandemic wave in the first quarter and limited disruptions seen during the third wave. It also said the securitisation of retail assets too was in line with earlier estimate of Rs 1.1 lakh crore, while additional securitisation of wholesale loans of close to Rs 15,000 crore was observed in the fourth quarter of the last fiscal.

The report further said for FY22, total securitisation through Direct Assignment (DA) transactions (bilateral assignment of pool of retail loans between two entities) accounted for close to 55 per cent of the total annual volumes, lower than about two-thirds seen over the past few years. It said this was partly on account of securitisation of wholesale loans in Q4, which were done through the Pass Through Certificate (PTC) route.