Securitisation volumes back to historic high after HDFC twins' merger

Housing finance company accounted for 23% of the FY23 volumes of around 1.8 trillion

Did you know securitisation volumes in FY24 are back to record highs of Rs 1.9 trillion, last seen in the two financial years before the pandemic. Securitisation is a process through which lenders sell the right to receive future payments from borrowers to a third-party and obtain a consideration for it much before the actual maturity of the original loans.

A look at the numbers tells you that this is despite the fact that HDFC Ltd is no more in this market after merging with HDFC Bank. The housing finance company accounted for 23 per cent of the FY23 volumes of around 1.8 trillion; and adjusted for this, growth is 27 per cent. In FY24, issuance diversity in securitisation was up at 165 originators logging 1,100 transactions in FY24 from 160 and 1,000 in FY23. It is to a great extent a reflection of non-banking financial companies (NBFCs) diversification of funding avenues. This was necessitated after the Reserve Bank of India upped the risk weights on bank exposures to NBFCs last November. This chart shows how the volumes have grown.