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Securitisation volume plunges 85% in Q1 FY21: Crisil
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SME Times News Bureau | 13 Jul, 2020
Securitisation volume plunged 85
per cent to Rs 6,200 crore in the first quarter of financial year
2020-2021, because of slow collections following the lockdown and the
loan moratorium offered by lenders, a Crisil report said on Monday.
The
report said that the decline comes after 15 months of "frenetic"
activity that was mainly driven by non-banking finance companies
(NBFCs).
"Deferment of transactions is along expected lines.
Limited disbursements in the first quarter reduced the immediate
liquidity needs of some larger, well-capitalised NBFCs," said Krishnan
Sitaraman, Senior Director, Crisil Ratings.
"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," Sitaraman said.
According to the report, asset-backed
securities (ABS) remained the dominant segment comprising 74 per cent
of the overall securitised volume in the quarter. Mortgage-backed
securities (MBS) constituted the balance volume.
Direct
assignment (DA) route, being the most-preferred for securitisation of
MBS deals, accounted for nearly two-thirds of all deals. However, the
partial credit guarantee scheme for direct assignment transactions
announced by the government did not draw much traction in the just
concluded quarter.
About 34 per cent of the market adopted the pass-through certificate (PTC) route of securitisation.
However,
in stark contrast with the overall market performance, transactions
backed by gold-loan receivables bucked the trend. They comprised nearly
half of the total securitisation transactions in the first quarter.
That
compares with 20 per cent, 7 per cent, and 2 per cent in the comparable
periods of fiscals 2020, 2019 and 2018, respectively.
The
increase in gold loan-backed securitisation is because of the relatively
short tenure of the loans, their strong performance over the past few
years, and secured nature of the asset class in a rising gold price
environment.
Barring this asset class, the number of originators
was limited in the first quarter. Only marquee players were able to draw
some interest, especially from private investors such as insurers and
new private banks, the report said.
Mutual funds have largely stayed away.
As
per the report, a return to pre-lockdown volume is likely only
gradually. With economic activity gathering pace in June, collections
have started to improve, though they are still a long way from
pre-lockdown levels.
Securitisation volumes also picked up with 67 per cent of the quarterly volume coming in the month.
Rohit
Inamdar, Senior Director, Crisil Ratings said: "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."
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Customs Exchange Rates |
Currency |
Import |
Export |
US Dollar
|
66.20
|
64.50 |
UK Pound
|
87.50
|
84.65 |
Euro
|
78.25
|
75.65 |
Japanese
Yen |
58.85 |
56.85 |
As on 13 Aug, 2022 |
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