Securitisation is the process of pooling and repackaging of homogenous illiquid financial assets into marketable securities that can be sold to investors
Mortgage lender Indiabulls Housing Finance is looking to raise ₹5,000 crore through the securitisation route in fourth quarter of the current financial year, according to a senior company official.
In the three months ended December 31, 2020, it had raised around ₹2,000 crore through the route.
Securitisation is the process of pooling and repackaging of homogenous illiquid financial assets into marketable securities that can be sold to investors.
"Our securitisation pipeline is strong. We should be able to raise almost ₹3,000 crore from the wholesale book and another ₹2,000 crore from the retail in this (Q4 FY21) quarter," the company's Deputy Managing Director Ashwini Kumar Hooda told PTI.
He said already securitisation transactions worth ₹2,000 crore have been done so far in the fourth quarter.
"Fourth quarter is when most of the securitisation transactions get bunched up. We had a lot of transactions for December that got carried forward to January," Hooda said.
Securitisation constitutes 25 per cent of the non-bank financier's overall borrowing and on an average, it raises around ₹2,500 crore per quarter through the route.
Overall, in 2020-21, it has raised a total of ₹28,119 crore through equity, bank lines, bonds and loan sell-downs.
The securitisation market is primarily intended to redistribute the credit risk away from the originators to a wide spectrum of investors who can bear the risk, thus aiding financial stability and provide an additional source of funding.
On disbursements, Hooda said that in the third quarter of 2020-21, fresh disbursements stood at ₹3,458 crore of which retail loan disbursals constituted 75 per cent.
"In the fourth quarter, we expect disbursement to go up to ₹4,500-5,000 crore," he said.
The company is also seeing good traction in loan co-lending and expects active sourcing to begin next quarter with three other co-lending tie-ups which are into the final stages of integration.
"We expect the monthly disbursal run rate through co-lending to reach ₹1,500 crore by September 2021," he said.
In a statement, the company said it continues to de-risk developer loan book through refinance and securitisation of loans.
"We continue to see strong traction in developer loan refinance and are in talks with multiple financial institutions for a sell-down of this book. We expect to reduce our wholesale book by 33 per cent by March 2022 and by 50 per cent by December 2022," it said.
On developer loans sourcing, the company said it is in talks with two large real estate-focused funds to set up an investment platform. The talks have progressed well, and it expects to set up an investment platform by September 2021.
In the quarter ended December, the company reported a 40.4 per cent dip in its consolidated profit after tax at ₹329 crore due to higher provisioning.
It had registered a profit after tax of ₹552 crore in the year-ago quarter.
Gross non-performing assets (NPAs) stood at 1.75 per cent and net NPAs at 0.77 per cent in the third quarter.
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