The financial year 2021-2022 witnessed a hike in securitization
Securitisation is a technique of dragging and repackaging liquid financial assets into commercial securities that can be traded to investors. According to the ratings of Icra, there was a significant reduction in securitisation volumes due to the pandemic and lockdown declared nationwide, in the first quarter of 2020-2021.
The amount was close to Rs 7500 crore. But later, the development of securitisation proportion by the Non-Banking Financial Companies and Housing Finance Companies reached Rs 17500 crore, of their loan assets.
If there is no regeneration of covid in the financial year 2022, this number is anticipated to reach Rs 1.2 lakh crore. As the lockdown was not that rigorous compared to the lockdown of the previous year, this did not influence much and the securitisation volume prospered in volumes.
Investors also comfortably participated in securitization which enhanced the collections of NBFCs. The reason which favoured the NBFCs is the absence of the microfinance sector from the securitisation market. The volumes were further dispersed equally between DA and PTCs.