In a report, volume more than doubled to Rs 50,000 crore in the first half of the current fiscal year.
The volume increased to Rs 20,000 crore in September 2021, growing around 85 per cent year-on-year and marking a clear recovery from the subdued activity seen at the beginning of this fiscal due to the pandemic's second wave, the agency said in a report.
It said the investors are getting reassured by the return to near normalcy across businesses and improvement in collection ratios in securitised pools and portfolios of originators.
Crisil's senior director and deputy chief ratings officer Krishnan Sitaraman said market activity usually suffers in times of uncertainty as in the pandemic's wake.
While investors are wary of taking fresh exposure in such times, originators, too, are not keen to raise too much fresh liquidity as disbursement activity contracts as well, he said.
However, the pace of transaction execution in September saw a smart turnaround and has taken the cumulative volumes for the first half of the fiscal to close to Rs 50,000 crore, more than double the last fiscal's first half, Sitaraman said.
Sell-down of loans using direct assignment DA routes remained dominant, with as much as 56 per cent of the volume digitized through this method, while the rest was via Pass Through Certificates PTC the report said.
Mortgage-backed MBS accounted for 45 per cent of volume in the first half of this fiscal year, cementing it as a highly resilient and reliable asset class. The private and public sector banks lapped more than two-thirds of these assets, it said.
Transactions underlying commercial vehicle loans comprised 50 per cent of volume in asset-backed ABS The report said with close to 90 players active on the market between April and September 2021, deal activity was widespread and distributed across asset classes.
On the investor side, banks public, private and foreign accounted for around 75 per cent of the issuances with mutual funds, non-banking financial companies and high net worth individuals accounting for the rest, it said.
Interestingly, the RBI's latest Master Directions for the industry in the second half of fiscal is expected to play a key role in setting the tone and pace of deals, the agency said.
The regulations will anchor market activity well. Given the robust pace of vaccination, expected incidence of new infections and expected spike in loan demand owing to festive season, financers are expected to resort to securitisation as an important avenue for raise funds, agency director Rohit Inamdar said.
This should support securitization volume in the second half of the fiscal, he added.