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Rating agency Crisil in its latest report has said that securitisation volume rose to Rs 45,000 crore in the first quarter of the current fiscal (Q1FY25), marking around 17% on-year, like-to-like growth (adjusted for the exit of a large HFC and regulatory measures on gold loan securitisation). Over 95 originators, including NBFCs and banks, tapped the market to diversify funding sources, compared with around 80 in previous fiscal. Banks were also more active in the market as originators, with transaction volumes reaching around Rs 8,500 crore in the first quarter itself against around Rs 10,000 crore for the entire fiscal 2024.

The report stated that in terms of asset classes, the share of vehicle loan securitisation (including commercial vehicles and two-wheelers) in overall first-quarter volume surged 400 basis points (bps) year-on-year to around 41%, with continuing credit growth momentum among top NBFC originators. Share of mortgage-backed securitisation fell 900 bps to around 25% in line with the HFC exit, and regulatory measures on gold loan securitisation led to their share falling to negligible levels compared with around 7% in the first quarter of last fiscal. Microfinance accounted for around 14% against 10%, and other asset classes increased their share significantly by 800 bps to around 20%. These consisted of personal loan (11%) and business loan securitisation (9%).

According to the report, among the two routes of securitisation, pass-through certificates (PTCs) accounted for a higher share of around 53% against direct assignments (DAs) at around 47%. While PTCs dominated vehicle and personal loan securitisation, DAs accounted for majority of mortgage, microfinance, and business loan securitisation. Banks continue to be the major investors with over 90% market share in the overall securitisation market. While public sector banks increased their investment activity last quarter through acquisition of retail DA pools to grow their loan books, private and foreign banks predominantly invested in PTCs. NBFCs and other investors such as alternative investment funds, insurers and high net-worth individuals/family offices made up the rest.