Securities volumes jump 80% in July-September, FY25 likely to see deals worth Rs 2.4 lakh crore: ICRA
Domestic rating agency Icra on Monday said import prices rose 80 percent year-on-year to Rs 68,000 crore in the December quarter, and raised its estimates for overall volumes this fiscal year.
The financial system is estimated to witness collateral agreements, where a lender transfers future receivables to another participant for an upfront fee, amounting to Rs 2.4 lakh crore, up from Rs 2.1 lakh crore earlier.
The new estimate represents a 25 percent increase over Rs 1.92 lakh crore in FY24, it said.
Volumes for October-December are similar to those seen in July-September (Q2), and the participation of private sector banks is very helpful, the agency said, adding that it is usually non-bank lenders who raise resources through this channel. .
“Continued portfolio sales by private banking firms boosted bond prices in Q3FY25,” group head of structured finance ratings, Abhishek Dafria said.
He added that more than a third of the total amount of securitization was established by banks in Q3, similar to what was seen in Q2.
It can be noted that a ‘deposit war’ has erupted in the banking system leading to concerns about the system’s ability to secure sufficient resources to meet credit demand, while the effect of consolidation has led HDFC Bank to adopt the privatization route.
“Security helps banks to improve their loan-to-deposit ratio, as the pace of receiving deposits is lower than expected in this budget. We expect banks to continue to hold part of their assets in the near term until the loan-to-deposit ratio reaches acceptable levels,” said Dafria.
Q3 volume was affected to some extent by relatively muted growth in disbursements in the NBFC sector, particularly in unsecured asset classes such as microfinance and personal loans, due to difficult industrial conditions, he said.
Personal loans and unsecured business loans are also facing asset quality pressure in recent quarters, therefore, their rates have been declining in Q3FY25, the agency said, adding that it does not expect any material impact on PTC’s rated credit quality (pass ). by certificate) transactions.
Of all security volumes, up to 60 percent of the volumes are issued by PTC, and the rest is for direct sales.
Investors’ preference for ensuring that public sector banks opt for direct channel (DA) while private sector banks opt for PTCs, adding that, among the asset classes to be loaned, car loans are the market, given that large banks and NBFCs are not in this we have been getting their auto loan and commercial vehicle loan portfolio.
The growth momentum shown by microfinance loans in the first quarter has slowed down in subsequent quarters due to the perceived pressure on asset quality in the industry, leading to a decrease in loans as well as lower funding requirements, he said.
