Securitisation market grows 40% in H1, but still a tiny part of global issuances

Mumbai: India’s securitisation market grew 40% in the first half of FY24 to cross ₹1 lakh crore mark as investor demand for such assets increased, but it still remained less than 1% of the global securitisation issuances, said CareEdge ratings.

Pass-through certificate (PTC) issuances account for over 50% of the volume of transactions surpassing direct assignment (DA) transactions. This ratio between PTC and DA has been shifted because of the merger of the HDFC entities, said the ratings company.

Secutarisation is the process of converting an asset into marketable securities which happen in two ways – PTCs and DA. While PTCs give the holder income earned from the securitised product, under DA, transfer of assets is directly to the buyer and not through a trust.

“The Indian securitisation market is on track to achieve an all-time high volume in FY24, with the driving factors being strong credit expansion and the demand for priority sector lending (PSL) assets,” said CareEdge in a release. “With recent regulatory changes on risk weights, securitisation of NPSL might find favour.”