InvestorQ : Have the volumes of securitization by NBFCs picked up once again after falling sharply in the pandemic period?
Anamika Sodhani made post

Have the volumes of securitization by NBFCs picked up once again after falling sharply in the pandemic period?

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Angel dcosta answered.
5 months ago
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Securitization is the process of raising fund from future cash flows of loans. In the post pandemic when NBFCs had come under stress, the securitisation volumes had certainly taken a big hit during the pandemic. However, the good news may be that these securitization volumes may have sharply risen in the Dec-20 quarter.

The shadow banking sector as the NBFC sector is popularly referred to, has securitised Rs.24,400 crore of retail loan assets in the quarter ending December 2020. This represents a year on year growth of 61%. But that is not the only point. What is more interesting is that the NBFC securitization value has been growing on a consistent basis in every sequential quarter.

The numbers of originators who are creating these pass through certificates and are undertaking securitization has shown signs of a very sharp improvement. In Dec-20 quarter 50 originators were active in securitization while it was 45 and 18 in Q2 and Q1 of the current fiscal year respectively. One of India‚Äôs leading rating agencies, ICRA, has projected the annual securitisation volumes to grow to Rs.90,000 crore in FY21. 

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