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Securitization in India – Opportunities & Obstacles Sudarshan.B.Rao 1PT10MBA64

Securitization is the process of pooling and packaging Financial Assets, usually
Relatively illiquid, into liquid marketable securities. Securitization allows an entity to
Assign (i.e. sell) its interest in a pool of financial assets (and the underlying security) to other entities.
Securitization in India:
While there has been a lot of discussion about the potential of securitization in India,
Actual deal activity has not kept pace. While some early adopters like ICICI, TELCO and Citibank have been actively pursuing securitization, almost all the transactions in the market so far have been privately placed with a majority of them being bilateral fully bought out deals.

Literature Review:
Mr. Manoj Dengla from ICICI Structured Products Group whose valuable insights have been considered for the paper. Mr. Pranay
Agrawal and Mr. V. Srikanth of Fractal Technologies Ltd. for narrating their securitization experience.

1. According to reports, the power sector in India needs a funding of about USD 17 billion over the next 10 years 1.
2.A revocable trust (SPV) purchases assets from the Originator and issues Pay Through Certificates to investors.
3. The deal size was Rs. 10.35 billion comprising 11,106 individual housing loans HDFC and LIC Housing Finance Ltd.
4. An ABCP conduit issues commercial paper to finance the purchase of assets ranging from credit card, auto and trade receivables to CBO and CLOs.

This paper discusses the present state of the securitization market in India, its potential and attempts to identify what needs to be done by various stakeholders in this market for
Securitization to grow…...

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