Mutual Funds Commodities Research Tax Planning IPO Our Team Contact Us  
Google
Web www.equitybulls.com
Research

| More

CRISIL Ratings: Securitisation volume surges 60% to first-quarter peak

Posted On: 2023-07-10 20:02:20 (Time Zone: IST)


Banks drive ~Rs 55,000 crore deals; robust collection trend, NBFC credit growth tailwinds

Securitisation volume soared ~60% on-year to ~Rs 55,000 crore this April-June, the highest ever in a fiscal first quarter, on strong demand for retail assets from banks coupled with increased use of securitisation as an alternative funding route by NBFCs1.

The participation demographic continued to be broad-based like last fiscal, with over 80 originators and 50 investors. The number of transactions have gone up from ~160 in the first quarter of fiscal 2023 to over 250. Private and public sector banks continued to be the dominant investors, followed by foreign banks.

Says Krishnan Sitaraman, Senior Director & Chief Ratings Officer, CRISIL Ratings, "Securitisation is allowing banks to do two things: keep driving their credit growth without impacting their direct exposure limits to NBFC balance sheets, and diversify exposure to granular retail loans, which are showing robust collection performance. With the momentum in NBFC credit growth and investor interest in retail loan pools, annual securitisation volume can exceed the previous peak of Rs 1.9 lakh crore this fiscal."

The share of vehicle loan securitisation (including commercial vehicles and two-wheelers) in overall first-quarter volume surged 900 basis points (bps) to ~37%, primarily driven by the top originators in the commercial vehicle segment that have relied on securitisation as an alternative funding tool to support their strong credit growth. This rise, along with continued momentum in other asset classes, has led to a relative decline in the share of retail mortgage-backed securitisation (MBS) by 1,300 basis points (bps) to ~34% in the first quarter. Microfinance securitisation cornered 10% and gold loans 8% of the market, in sync with their share in the first quarter of last fiscal.

The share of direct assignment (DA) transactions fell to ~50%, compared with 55-65% in the past three fiscals, on account of the drop in the share of MBS, which are largely undertaken via the DA route. So far, DAs have largely been dominated by mortgages and gold loans given the relatively higher safety in these asset classes, while pass-through certificates (PTCs) found greater acceptance in the vehicle, microfinance and unsecured loan segments.

Among investors, while foreign banks focused on investing in PTCs, public sector banks preferred DA pools. Private sector banks invested in a mix of DAs (mostly mortgage and gold loan pools) and PTCs.

The share of mortgages and DA in securitisation volume will reduce further, given the merger of a large originator in the housing finance space with a bank. Consequently, PTCs will gain share in the market.

Says Ajit Velonie, Senior Director, CRISIL Ratings, "PTCs have facilitated cautious entry for investors into new originators and asset classes, given the presence of credit enhancement, which increases investor protection. PTCs also offer structuring flexibility that enables better alignment of issuances with investor needs. For instance, those with replenishing structures have continued to pick up in the first quarter of this fiscal, enabling longer-tenure PTC issuances to be backed by shorter-tenure loans."

Shares of CRISIL Limited was last trading in BSE at Rs. 3829.15 as compared to the previous close of Rs. 3827.95. The total number of shares traded during the day was 2580 in over 603 trades.

The stock hit an intraday high of Rs. 3910.00 and intraday low of 3786.75. The net turnover during the day was Rs. 9896499.00.


Click here to send ur comments or to feedback@equitybulls.com

Disclaimer:The article above is a gist / extract of the original report prepared by the research firm / brokerage firm. This article is not to be considered as an offer to sell or a solicitation to buy any securities. This article is meant for general information only. www.equitybulls.com, its employees or owners or the research firms, its employees or owners won't be responsible for any liability that may arise from information, errors or omissions in these articles. www.equitybulls.com or its employees or owners / the research firms or its employees or clients or owners may from time to time hold positions in securities referred in this article. For detailed research reports, please contact the concerned research firm directly.





Other Headlines:

CRISIL Ratings: Domestic demand, softer cotton prices to sustain RMG growth

CRISIL Ratings: Higher workplace occupancy to light up cigarette volume 7-9%

CRISIL Ratings: Apparel retailers to grow 7-8% this fiscal via expansion, festival spur

CRISIL Ratings: For tea companies, ~8% revenue degrowth brewing this fiscal

CRISIL Ratings: Revenue of paper makers to crumple 8-10% this fiscal

ICRA expects banking sector to stay resilient, outlook remains Positive

CRISIL MI&A: Red-hot domestic demand to stave off steel price melt this fiscal

CRISIL Ratings: Replacement demand to drive tyre volume up 6-8% this fiscal

CRISIL Ratings: Home textiles makers to weave revenue, profitability rebound this fiscal

Capital outlay on roads, renewables seen rising ~35% in this and next fiscals to Rs ~13 lakh cr, backed by strong execution pace

Softening demand to moderate Indian IT services industry growth to 3-5% in FY2024: ICRA

CRISIL Ratings: Telcos may dial up Ebitda 15-17% to Rs 1.2 lakh crore this fiscal

CRISIL Ratings: Social welfare spend of states to hit a decadal high this fiscal

CRISIL Ratings: Footwear sector revenue to tread ~11% higher this fiscal

CRISIL Ratings: Robust demand to whip up dairy industry revenue 14-16%

Indian hospital industry's operating profit margin will remain healthy at over 22% in FY2024: ICRA

Weak overseas demand to snip 5-6% off jute revenue this fiscal - CRISIL

ICRA expects the telecom services industry to report moderate revenue growth of around 7-9% in FY2024 amid high capex spends

CRISIL - Viscose staple yarn makers set for 10-12% revenue growth this fiscal

Sugar mills seen unscathed despite pricier cane, lower exports - CRISIL

CRISIL Ratings: Specialty chemicals on domestic drive, revenue seen growing 6-7%

CRISIL Ratings: Higher ad spends to lift revenue 13-15% for print media this fiscal

Paytm: Top brokerages, such as ICICI Securities, Axis, Dolat lift Paytm's target price to Rs. 1250

CRISIL Ratings: FMCG sector to witness 7-9% rise in revenue this fiscal

CRISIL MI&A and ATMA: Tyre industry on a roll, driving towards doubling in size

CRISIL Ratings: Slowing US, EU to chip 6-8% away from handicraft sales this fiscal

CRISIL MI&A: One out of five MSMEs to see stretch in working capital days

Yes Securities Identifies Rural India as Key Driver of Economic Recovery in Latest Report

CRISIL Ratings: Revenue of automotive component makers to grow 10-12% this fiscal

CRISIL: Residential real estate sales to grow 8-10% this fiscal

CRISIL MI&A: Cement prices to dip 1-3% this fiscal despite healthy demand

CRISIL Ratings: Aircraft MRO services revenue could leap 3x in 5 fiscals

Demand pressures to moderate revenue growth of Indian fashion retail entities to 10% in FY2024: ICRA

CRISIL Ratings: Revenue of organised gold jewellers to rise 16-18% this fiscal

CRISIL Ratings: Revenue of top 18 states to grow at 6-8% this fiscal

Automobile Sector - Monthly Quick View - May'23 - Steady YoY and MoM Growth on Low Base; UVs are Clear Winner...

CRISIL Ratings: New guidelines lend much-needed clarity to FLDG usage

MSP for kharif crops - Views of Pushan Sharma, Director - Research, CRISIL Market Intelligence and Analytics

PMI Services logs a record high, Employment scenario, however, remains a concern

Road construction to witness 16-21% jump in FY2024, ahead of General Elections: ICRA

Sustained demand momentum to drive double-digit revenue growth for the Indian hotel industry in FY2024: ICRA

HCL Technologies Ltd - Q4FY23 Result First Cut - A marginal miss on major parameters, though PAT beats expectations

Indian quick-service restaurant industry to witness strong growth in near to medium term with expected ramp-up in store additions: ICRA

HDFC Securities Institutional Research Desk: Report on Infosys - On the back foot

Infosys Ltd. Q4FY23 Result First Cut - A miss on all fronts

Healthy credit growth of NBFCs and HFCs led to highest post-pandemic quarterly securitisation volumes in Q4 FY23, estimated at ~Rs 61,000 crore: ICRA

Impact of Monsoon forecast on Markets - Reliance Securities

HDFC Securities Institutional Research Desk: Report on Kolte Patil Developers - Premiumisation to drive the next leg of growth

Operating margin of domestic base metal entities to remain range-bound at 19-20% in FY2024: ICRA

HDFC Securities Institutional Research Desk: Report on QSR Thematic - QSR: Fishing time?


Website Created & Maintained by : Chennai Scripts
West Mambalam, Chennai - 600 033,
Tamil Nadu, India

disclaimer copyright © 2005 - 2020