Led by the stable asset quality in retail loans, securitisation volume jumped 48% in the first six months of the current fiscal to Rs 75,000 crore, ratings agency Crisil said in a statement. Of this, volumes during the first quarter stood at Rs 35,000 crore, according to an earlier report by the agency.

“The long track record of stable performance of securitised pools, despite several episodes of adversity, may have eased investor concerns. That said, the reticence of some investors to take fresh exposure led to some deals remaining unexecuted, shaving off 10% from the segment’s potential growth,” Krishnan Sitaraman, senior director and deputy chief ratings officer, Crisil, said.

Mortgage-backed securitisation loans remained the largest segment among asset classes, accounting for around 40% of market volume in H1FY23, although its share declined from 45% in the same period last year. The securitisation in property-backed loans was followed by commercial vehicle and microfinance loans.

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The direct assignment transactions accounted for close to 62% of the total volume while that of pass-through certificates declined to 38% from 44% a year ago. Participation of private banks was higher compared to public sector banks, which together bought most of the loan assets on offer, the agency said.

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The securitisation sector has undergone some unconventional practices in the past few months, one being non-mortgage transactions offering flexible rates on their liability instruments, which was a first for non-mortgage deals. Banks and NBFCs have reached arrangements under new lending formats such as co-lending. However, its impact on securitisation will likely not be material in the near term till the players get accustomed to the new arrangement, the agency said. “Until the new arrangements are able to offer these attributes, it would be amiss to envisage these new channels of lending as significant competition to securitisation,” Rohit Inamdar, senior director at Crisil, said.