Securitisation Volumes Projected to Hit ₹60,000 Crore in Q2 FY25, Says ICRA, Driven by Private Banks’ Portfolio Sales

Securitisation Volumes Projected to Hit ₹60,000 Crore in Q2 FY25, Says ICRA, Driven by Private Banks’ Portfolio Sales

Securitisation volumes for standard assets in Q2 FY25 are projected to reach approximately ₹60,000 crore, representing a 36% quarter-on-quarter growth and a 31% year-on-year increase, according to a report by ICRA. This surge in volume is attributed to large private banks actively selling their portfolios to enhance their credit-to-deposit ratios, given the slower deposit growth.

For the first half of FY25, securitisation volumes are estimated at ₹1.04 trillion, reflecting a modest 2% year-on-year increase, as Q1 saw relatively subdued activity. According to Abhishek Dafria, Senior Vice President and Group Head, Structured Finance Ratings at ICRA, the participation of private sector banks as originators has been pivotal in driving the recent growth in securitisation. In Q2 FY25, around 35% of securitised assets originated from private banks—a significant increase from previous years when their involvement in this market was minimal.

Dafria also noted that non-banking financial companies (NBFCs) continue to rely on securitisation to diversify their borrowing sources and mitigate asset-liability mismatches. However, while the market has shown impressive growth in the second quarter, the sustainability of this trend remains uncertain due to the limited appetite for large-size transactions. ICRA expects securitisation volumes to reach around ₹2.1 trillion in FY25, up from approximately ₹1.9 trillion in FY24.