Among the asset segments, commercial vehicle loans accounted for 31 per cent of the overall securitisation volumes in Q1FY21 and the share of mortgage-backed securitisation continued to decline to 26 per cent in Q1FY21, from 48 per cent of the entire volume in Q1FY19. The gold loan segment rose to 32 per cent in the current period, as opposed to 13 per cent share in Q1FY20.
“Investor appetite for gold loan securitisation was supported by secured nature of the asset class which is also highly liquid security with better yields and stable portfolio performance. The rise in gold prices in the past quarter also improved the loan-to-value ratio from the lenders’ perspective, reducing chances of any loss,” Icra said.
While securitization volumes in the quarter dipped significantly, June saw an improvement. In fact, more than two-thirds of the total volumes in Q1FY21 were completed in June. And, the agency expects the volumes to improve in the coming quarters, with collections picking up for shadow banks, albeit at a slower pace.
“The traction will also be supported by NBFCs who have already recommenced disbursements, albeit lower amounts at present, and would utilise securitization of their pooled assets as a funding tool”, said Abhishek Dafria, VP & Head–Structured Finance Ratings at Icra.
Furthermore, it is expected that government help to the ailing shadow banking sector in terms of extending the partial guarantee scheme will support securitisation volumes. “We estimate that the annual securitisation volumes should remain significantly lower in FY2021 than the preceding fiscal at about Rs 1.2-1.3 trillion given the impact of the pandemic and the lower availability of eligible pools for securitisation”, Icra said.
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