Latest News | Securitisation Volume Crosses Rs 1 Lakh Crore in First Half

Mumbai, Oct 13 (PTI) Securitisation volume crossed the Rs 1 lakh crore-mark in the second quarter of the current fiscal after a strong start in the June quarter.

Securitisation volume in the April-June period of the current fiscal was at Rs 55,000 crore.

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According to Care Ratings, the volume includes both Pass-Through Certificate (PTC) and Direct Assignment (DA) transactions and the volume, which clipped at over 40 per cent on-year, was primarily driven by robust credit expansion and a sustained demand for loans that meets Priority Sector Lending (PSL) norms.

Total securitisation volumes reached around Rs 1.01 lakh crore in the April-September period, marking a substantial 40 per cent increase over the same period in FY23 -- the highest volume in recent years.

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The anticipated higher economic growth will further drive consumer spending, boosting credit growth and securitisation, it said.

In the last two quarters, there has also been a noticeable increase in the volume of transactions backed by unsecured loans, both in the PTC and DA categories.

Traditionally, DA transactions dominate overall volumes, however, due to the merger of HDFC entities, DA volumes declined during the quarter.

For the first time, the share of DA transactions in the overall volume was around 49 per cent in H1, while PTC issuances contributed to over half of overall volume during this period.

Mortgage-Backed Securitisations (MBS) comprised 44 per cent of DAs with Asset-Backed Securitisation (ABS) and microfinance loan transactions constituting around 35 per cent and 21 per cent of the DA volume, respectively, the ratings agency said.

It anticipates securitisation volume to continue to grow and gain further momentum this fiscal.

Sriram Rajagopalan, an associate director at the agency, if the trend seen in H1 continues at its current pace, the market is poised to achieve record-breaking annual volumes in FY24.

This optimism is underpinned by the anticipation of GDP growth exceeding 6 per cent, which will serve as a catalyst for sustained growth in the securitisation market.

(The above story is verified and authored by Press Trust of India (PTI) staff. PTI, India’s premier news agency, employs more than 400 journalists and 500 stringers to cover almost every district and small town in India.. The views appearing in the above post do not reflect the opinions of LatestLY)