Mutual Funds Commodities Research Tax Planning IPO Our Team Contact Us  

| More

Retail pools continue to display stable performance across various asset classes: ICRA

Posted On: 2024-03-20 19:55:37 (Time Zone: IST)

ICRA-rated securitised pools have shown healthy performance, with collection efficiencies ranging from 92% to 107% across all asset classes in FY2024 so far, aided by a favourable operating environment, rigorous collection efforts, and adoption of digitised processes. Housing Loans (HL) and Loans Against Property (LAP) pools have showcased steady collections in FY2024 so far. This can be attributed to the critical nature of the underlying collateral for the borrowers and advances in online collection methods.

The vehicle pools are expected to continue their stable performance in the medium term, given the strong domestic economic cycle; financiers would also ramp up the collection efforts in Q4 of the fiscal. However, the impact of the current fluctuations in global fuel prices would be a key monitorable. Microfinance institutions embraced technology-driven collections, post the Covid-19 pandemic, showing positive signs and healthy performance. Secured Small and Medium Enterprise (SME) pools have outperformed unsecured SME pools in terms of collection efficiency and asset quality. Furthermore, the delinquencies in the securitised personal loans pools have remained range-bound, with 90+dpd between 1.6% and 3.4%.

Speaking on this, Mr. Abhishek Dafria, Senior Vice President and Group Head - Structured Finance Ratings at ICRA said: "The limited fluctuations in collections over the past two years demonstrate the strength of the securitised pools, which consist of cherry-picked borrowers with better repayment track records and lower propensity to default. ICRA anticipates the collections to remain robust over the near to medium term on the back of a steady economic outlook. Moreover, the credit enhancements in the transactions should be enough to meet the investor pay-outs and absorb unexpected shocks of lower collections, barring any drastic unforeseen events."

In MBS transactions, the rate hikes undertaken during the last two years did not have a significant bearing on the collection efficiencies as most lenders passed on the hikes in the form of elongated tenures rather than increased EMIs. For vehicle loan pools, there has been a marginal decrease in the collection efficiency in the first two months of Q2 FY2024 and Q3 FY2024, a trend usually seen every year as lenders increase collection efforts towards the end of the quarters, and especially in the last quarter of the financial year. The collections of the microfinance (MFI) pools have remained steady. Although the delinquencies increased slightly during Q3 FY2024, ICRA expects them to stabilise in Q4 FY2024 and in the subsequent quarters owing to greater collection efforts.

The overall MFI industry has witnessed higher delinquencies in Punjab due to the ongoing farmers' agitation. However, the live ICRA-rated pools have a low share in Punjab, and moreover there has been healthy collection efficiencies in this state. In the recent transactions, ICRA has observed that the investors have been proactively filtering out Punjab from the shortlisted pools. Hence, the impact of the agitation on MFI securitisation is expected to be minimal going forward. Overall, SME pools' 90+dpd increased from 1.5% in June 2023 to 2.6% in Jan 2024. The major contributors towards this rising delinquency are the unsecured SME pools. The secured SME pools continue to report robust asset quality. For personal loans, the collections have seen a slight downward trend in the past two quarters due to higher festive season spending by the customers and the relatively low priority of personal loans repayment, being unsecured in nature. The collection efficiency reduced from 95% in June 2023 to 93% in December 2023.

Click here to send ur comments or to

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., 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. 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:

One Point One Solutions Ltd - A Strategic play in the Indian BPM Landscape | BUY

CRISIL Ratings: For fleet operators, revenue growth to double to 9-11% this fiscal

NHAI's targeted asset monetisation could fetch up to Rs. 60,000 crore in FY2025: ICRA

Kotak Institutional Equities - Economy: RBI's bonanza to the central government

CRISIL Ratings: Revenue of organised gold jewellers to rise 17-19% this fiscal

Ventura initiates coverage on Responsive Industries, sees upside scope of 45% sets a price target of Rs 436

GDP growth to dip to a four-quarter low of 6.7% in Q4 FY2024 from 8.4% in Q3: ICRA

ICRA: Record high number of resolution plans approved under IBC in FY2024

India Inc revenue growth likely moderated to 4-6% in March quarter - CRISIL Market Intelligence and Analytics

Construction sector entities' revenues to grow by 12-15% in FY2025; margins to expand by 25-50 bps: ICRA

MakeMyTrip Report Reveals Where, How, When and With Whom India Travels

ICRA revises banking sector outlook to Stable from Positive

Massive shift in career aspirations as 8 out of 10 professionals eye new career paths this appraisal season, reports

ICRA: Annual securitisation volumes estimated at Rs. 1.88 lakh crore for FY2024

46% of women opted for used cars in March 2024 in the country: Spinny Reports

Addressing data privacy, security and ethical challenges is essential for the responsible adoption of GenAI in healthcare: PwC India report

ICRA predicts small finance banks will raise over Rs 10,000 crore in FY 2024, up from Rs 6,400 crore in FY2023

CRISIL Ratings: Complex fertilisers volume to grow 4-5% next fiscal

Issuances of securitised debt instruments (SDI) by corporate entities to rise to Rs 100 crore in FY2024: ICRA

Godrej Interio's 'HomeScapes' Study reveals Indians want ‘Me-Time’ at home

GDP growth to moderate to 6.0% in Q3 FY2024, led by agriculture and industry: ICRA

Indian stock exchanges rank first in the world in terms of the number of IPOs in 2023

CRISIL Ratings: After soaring this fiscal, airlines to land >20% operating profit growth next fiscal

Rising frauds propel demand for AI/ML strategies: Experian Study

Cement makers to add 150-160 MTPA capacity by fiscal 2028 - CRISIL

Investor exuberance propelling broking industry performance, MTF achieves a new high: ICRA

CRISIL Ratings: Securitisation volume up ~20% in first nine months of this fiscal

India is fastest growing large economy globally in CY2023-CY 2024 - Pantomath Report

CRISIL Ratings: Market share of gold-loan NBFCs steady despite bank competition

CRISIL Ratings: Vehicle loan AUM to vroom past Rs 8 lakh crore next fiscal

45% of Newbie traders claim that 'not knowing enough' is the primary reason for losses incurred in Futures & Options trading - Sharekhan's survey reveals

CRISIL Ratings: Agri pump makers to see 7-9% revenue growth next fiscal

Indian mutual fund industry likely to sustain its strong inflows in 2024: ICRA Analytics

CRISIL Ratings: Operating profit of offshore rig operators to swell 30% next fiscal

CRISIL Ratings: Organised F&G retailer revenue to grow in mid-teens next fiscal

CRISIL Ratings: Shippers see a further revenue dip of 5-7% next fiscal as charter rates course correct

82% of professionals are concerned about job redundancy due to emerging technologies: Hero Vired Report

UPI transactions witnesses 118% rise at retail stores in 2023: PayNearby Report

Happy Forgings Limited - IPO - A trusted supplier for several Indian and Global OEMs - Reliance Securities

CRISIL Ratings: Penetration of electric buses set to double next fiscal

India's refined copper consumption to grow by 11% in FY2024, despite global headwinds: ICRA

CRISIL Market Intelligence and Analytics - Curb on cane juice for ethanol - Sugar output lift

Stable Repo Rates to Keep the Momentum Going for the Housing Market - Anuj Puri, Chairman - ANAROCK Group

Payback period for investment in sustainable warehouses come down to three years in India: A JLL - IndoSpace report

CRISIL Ratings - Profit margins of cotton yarn spinners to plunge 250-350 bps to decadal lows of 7-8% this fiscal

Government, PSUs, and Defence sector experience 14% upsurge in hiring: foundit Insights Tracker

CRISIL Ratings: Spirits high for organised liquor makers, revenues seen up 13%

Corporate bond market to more than double by fiscal 2030 - CRISIL

Gas Utilities : Gas consumption at record highs, growth now to trickle - Kotak Institutional Equities

Emkay and Geojit increase target prices of LIC, expect over 20% upside

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

disclaimer copyright © 2005 - 2020