Securitisation Volume Soars to Rs 70,000 Crore in Q2 FY25, Driven by Vehicle Financing
Securitisation volume in India surged by 56% year-on-year to Rs 70,000 crore in the second quarter of FY25, primarily fueled by vehicle financing, according to a report by CRISIL Ratings released on Wednesday.
This increase was largely driven by significant issuances from key players, including a major private sector bank and several non-banking financial companies (NBFCs) focused on vehicle financing. As a result, securitisation volume exceeded Rs 1.15 lakh crore in the first half of the fiscal year, reflecting a 15% growth compared to the previous year.
Banks dominated the investor base, comprising over 70% of the securitisation volume during this period. Aparna Kirubakaran, Director at CRISIL Ratings, noted that strong market activity in the first half was propelled by substantial originations from a leading private sector bank and various vehicle financiers.
“Securitisation remains an efficient alternative source for raising funds as banks manage high credit-deposit ratios,” Kirubakaran added.
Non-banking entities, particularly in vehicle financing, accounted for over two-thirds of securitisation originations, sustaining their significant market presence. Vehicle loans, including commercial vehicles and two-wheelers, made up 45% of the securitisation volume in the first half, solidifying their position as the largest asset class.
Mortgage-backed securitisation loans also experienced notable growth, increasing by 23% and regaining around 10% of the total share compared to the previous fiscal year.
While the shares of personal loans (7%) and business loans (9%) remained unchanged, the share of micro-finance loans declined to 10% from 16% last year, as originators exercised caution amid early signs of asset quality issues.
The report anticipates that banks and NBFCs will continue to leverage the securitisation route for funding diversification, projecting the market to reach all-time highs this fiscal year.
