Favourable Macroeconomics, High Credit Growth Led To Elevated Securitisation In Q1FY24: Report
The buoyancy in the securitisation market continued in the first quarter of the current fiscal, a recently released Icra report revealed. It stated that the growth was primarily reflective of encouraging macroeconomic conditions and healthy credit demand throughout FY2023, which continued in Q1 FY2024 as well.
The overall market is expected to grow this year to Rs 1,90,000 crore, propelled by an increase in volumes from the existing originators as well as the emergence of new originators.
The report highlighted that the securitisation amount is even more than the pre-covid level in Q1 of 2024 as compared to Q1 of 2020 when there was no lockdown.
Also, securitisation has witnessed an exponential increase post-covid from merely Rs 87,300 crore in FY 2021 to Rs 1,80,600 in FY 2021.
In Q1FY24, securitisation volumes grew by 72 per cent YoY, amid the stable macroeconomic conditions and an increase in funding requirements of non-banking finance companies (NBFCs) and housing finance companies (HFCs) to meet growing credit demand.
The rating agency expects volumes to remain healthy throughout FY2024, though impacted to some extent following the merger of HDFC (a key originator in the past) with HDFC bank.
