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Muthoot Microfin raises Rs 562 cr via securitisation

Press Trust of India  |  Mumbai 

Pappachan group's micro-lending arm raised 561.7 crore through asset securitisation in the December quarter, when the non-bank lending segment was facing huge troubles with liquidity.

With this, the total amount raised through securitisation by the IPO-bound Microfin has crossed 1,300 crore during the first nine months of the fiscal.

"Securitisation helps us raise funds for expansion and leverage our capital efficiently to help maximise returns for shareholders," said.

Securitisation refers to transactions wherein a lender sells a portfolio of future receivables.

Commercial banks wanting to meet their priority sector lending requirements have bought the portfolio, a statement from the company said, adding have bought 845 crore of its portfolio this fiscal while the rest was snapped up by

Its peer Manappuram Finance's had recently securitised over Rs 611 crore of assets during the current fiscal.

Securitisation by non- and housing companies during the first nine months of the fiscal shot up to Rs 1.44 trillion from the Rs 84,000 crore in the year ago period as these lenders faced liquidity troubles, according to domestic ratings agency

The funds raised through this route help such companies meet their repayment obligations.

Stating that all the transactions undertaken by his company are through the direct assignment route, Sayeed said it is a win-win where NBFCs are able to raise resources while banks are open to it as it doesn't qualify as exposure to the troubled NBFCs.

The company, which has a network in 16 states serving 1.3 million borrowers, said it is likely to come up with a public issue in the near future.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Sun, January 13 2019. 18:35 IST