Securitisation volumes on track to rise 60% in Q1: ICRA

Mumbai: Securitisation volumes are estimated to rise 60% on-year to ₹53,000 crore in the first quarter of the current financial year, driven primarily by non-banking finance companies and housing finance companies, rating agency ICRA's analysts said.

"Despite the rise in interest rates over the past year, the retail credit demand in the country remained strong, resulting in increased financing requirements for the NBFCs and HFCs. Lenders continue to depend on securitisation as a means to raise funds as it helps in diversifying their fund-raising avenues," Abhishek Dafria, senior VP and group head, structured finance ratings, ICRA, said.

Securitisation volumes, taking into account both direct assignments and pass-through certificates, have seen a strong recovery after the Covid crisis, with full-year volumes of ₹1.8 lakh crore in FY23, close to pre-pandemic numbers, the rating agency said.

While the exit of mortgage finance giant Housing Development Finance Corp from the market due to its merger with HDFC Bank will impact volumes in subsequent quarters, Dafria expressed optimism about growth prospects.

"We foresee market to grow this year to ₹1,90,000 crore, propelled by increase in volumes from the originators as well as emergence of new originators," he said.