Retail asset securitisation growth momentum continues, up nearly 28% in FY22: Rating Agency

The retail asset securitisation market witnessed a growth of around 28 per cent in the financial year 2021-22 (FY22), as compared to the previous fiscal, rating agency firm CareEdge Ratings, said in its report on Friday. 

According to the report, the total market volume, including direct assignment (DA) transactions) for FY21-22 was around Rs 113,000 crore up from around Rs89,000 crore in FY20-21. 

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The split between pass-through certificate (PTC) and DA transactions has remained largely at the same level, with DA transactions comprising around 64 per cent of the overall
volume. 

In addition to retail asset securitisation, the year also witnessed an aggregate securitisation volume, excluding DA transactions of around Rs 15,000 crore for corporate assets.

The market witnessed an uptick in deal momentum from Q3FY22 and surged in Q4FY22 for a cumulative H2FY22 volume of around Rs 70,000 crore, CareEgde estimate. 

The second wave was more severe than the first and led to widespread disruptions, which affected the disbursements and collection performance across asset classes, the rating agency said, adding further that this led to stagnation or even degrowth in the portfolios of many originators, thus shrinking the available stock for securitisation. 

Consequently, the combined effect of the pandemic and the new regulations led to retail securitisation volumes being muted in H1FY22, with an estimated overall volume of Rs 43,000 crore. It was still higher than the H1FY21 figure of around Rs 22,000 crore.