The overall securitisation volumes stood at Rs 45,000 crore in the first quarter of the current fiscal (FY25), down 20 per cent from the same period last year, largely due to the exit of a large housing finance company (HFC) in 2023, a report showed on Friday.
Excluding the HFC, the securitisation volumes remained largely flat on a year-on-year (YoY) basis, according to the ICRA.
It estimated securitisation volumes to pick up in the subsequent quarters and cross Rs 2 trillion for FY2025.
Securitisation is a process whereby one lender bunches up a loan or a set of loans and passes on the future receivables to another financier against an upfront payment.
“The securitisation market volumes have not seen a major uptick in Q1 as overall disbursement growth in the NBFC sector has moderated, especially in the unsecured lending space, following the cautionary advice of the Reserve Bank of India,” said Abhishek Dafria, SVP and Group Head, Structured Finance Ratings, at ICRA.
However, the securitisation market continues to widen with new originators, even from the banking sector, raising funds through this route in the quarter, which bodes well for the industry’s long-term growth.
“We expect securitisation volumes to pick up in subsequent quarters boosting annual volumes above Rs 2 trillion in FY2025,” Dafria added.
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An increase in participation by banks as originators is likely to boost volumes in the coming quarters, said the report.
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