Securitisation volumes likely to have touched Rs 60,000 cr in Q2: Icra

Securitisation volumes in Q2FY25 are likely to have touched around Rs 60,000 crore, up 31 per cent year-on-year (Y-o-Y), driven by participation from private sector banks as originators, who are selling down their portfolios to improve their credit-to-deposit ratios, said rating agency Icra.

HDFC Bank, in its quarterly update, said it has securitised Rs 19,200 crore of loans in Q2FY25 as a strategic initiative to lower its elevated credit-deposit ratio.

“In Q2FY25, 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 were almost non-existent in this market as originators,” said Abhishek Dafria, senior vice president, structured finance ratings, at Icra.

In the first half of FY25, the securitisation volumes are estimated to have touched Rs 1.04 trillion, up 2 per cent Y-o-Y as the volumes had been relatively muted in Q1. However, the rating agency expects the securitisation volumes to reach about Rs 2.1 trillion in FY25 compared to Rs 1.9 trillion in FY24.

Vehicle loan receivables continue to hold the highest market share among the various asset classes being securitised, given the presence of large non-banking financial companies (NBFCs) in this space and the moderate tenure of the product. However, mortgage-backed loans such as home loans or loans against property continue to face challenges, given their longer tenure and interest rate risks, which act as a deterrent for investors.