Of the overall securitised volumes, CRISIL’s data suggests that the Asset-backed securities (ABS) remained the dominant segment comprising 74% of the total.
Also, the rating agency points out that Mortgage-backed securities (MBS) constituted the balance volume. Subsequently, the Direct assignment (DA) route, being the most preferred for the securitisation of MBS deals, accounted for nearly two-thirds of all deals.
However, CRISIL states, in stark contrast with the overall market performance, transactions backed by gold-loan receivables bucked the trend. The number of gold loan originators, too, has risen from two in first three months of fiscal 2020 to five so far this fiscal.
Krishnan Sitaraman, Senior Director, CRISIL Ratings, “Deferment of transactions is along expected lines. Limited disbursements in the first quarter reduced the immediate liquidity needs of some larger, well-capitalised NBFCs. On the demand side, a vast majority of investors are waiting for clarity on economic activity and borrower cash flows and the consequent impact on collections stability.”
According to CRISIL, only marquee players were able to draw some interest, especially from private investors such as insurers and new private banks. Mutual funds have largely stayed away.
Going forward, Rohit Inamdar, Senior Director, CRISIL Ratings, “There is no doubt that securitisation will remain an important tool for NBFCs to mobilise liquidity. With the phased opening-up of the economy, we expect the current quarter to see more transactions than the first quarter. The overall pace of recovery in transactions will be a function of improvement in economic activity and collection efficiency trends in the retail segment over the next few months.”
