Non-bank lender Home Credit India Finance has raised Rs 153 crore from DCB Bank and IFMR Capital by way of securitising consumer loans, the company announced Wednesday.
This is the third such deal by Home Credit India, and first in the consumer loan space.
The company, which is a part of Prague-based Home Credit Group, had raised Rs 87 crore earlier from the same set of investors by securitising two-wheeler loans.
“The market for loan securitisation transactions in India has been growing steadily over the last few years, both in volume and ticket size,” said Mariusz Dabrowski, chief financial officer at Home Credit India.
Securitisation is financial process of pooling various loan receivables and selling their related cash flows to third party investors as securities. This frees up capital for fresh lending.
The Home Credit deal was arranged by IFMR Capital while the investors subscribed to the two tranches of pass-through certificates (PTCs), issued by the special purpose vehicle.
“Securitization of consumer durable asset receivables will further broaden the asset class choices available for securitisation market and cater to new investor classes looking at shorter tenure instruments. It reflects the deepening of the industry as a whole,” said Rajesh Mokashi, managing director at CARE Ratings.
