Securitisation volumes in India touch Rs 60,000 crore in Q2 FY25

New Delhi : The securitisation volumes of standard assets in India reached Rs 60,000 crore in the July-September period in FY25, a growth of 36 per cent on quarterly basis and 31 per cent on year-over-year basis, according to a report on Monday.

In the April-September period, the securitisation volumes estimated to have touched Rs 104,000 crore, reflecting a modest YoY growth of 2 per cent, as the volumes had been relatively muted in the April-June period, according to credit rating ICRA. The report expects the market volumes to reach Rs 2.1 lakh crore in FY25.

According to the report, the sharp increase in the quarterly volumes has been fuelled by large private sector banks selling down their portfolio to improve their credit-to-deposit ratio, given the relatively lower pace of deposit accretion being witnessed.

Large ticket transactions by private sector banks led the steep growth in overall securitisation volumes for Q2 FY25.

Abhishek Dafria, SVP and Group Head, Structured Finance Ratings, at ICRA, said the securitisation volumes in the current year would benefit from participation of private sector banks as originators, given the challenges being faced to raise deposits while the credit demand remains strong.

“In Q2 FY25, about 35 per cent of the assets securitised had been originated by private sector banks, which is a significant boost, compared to previous years when banks used to be almost non-existent in this market as originators,” Dafria added.

The non-banking financial companies (NBFCs) also continue to raise funding through securitisation, as it diversifies their borrowing liabilities and improves the asset-liability mismatch.

“We believe the market is on track to reach our estimate of Rs 2.1 lakh crore in FY25 compared to Rs 1.9 lakh crore in FY24,” Dafria added.

Securitisation is largely being done through the issuance of pass-through certificates (PTCs) in the current fiscal while the proportion of direct sell-down or direct assignments (DA) has reduced.

The securitisation market has been widening over the past few years with the emergence of new originators as well as investors, and this development has continued in the current fiscal as well, the report mentioned.