Securitisation market makes a comeback

With interest rates softening and credit demand easing, banks have revived their interest in asset securitisation. According to sources, public sector banks (PSBs) are receiving offers from private banks keen to sell a part of their portfolio through the securitisation route.

Recently, Icra had rated about Rs 1,800-crore securitised paper of ICICI Bank, which had personal loans as its underlying asset. This is the largest pool of personal loan securitised by a bank in the Indian market.

“Most banks have booked loans at very good rates. Going forward, if rates soften or even if they remain stable, securitisation market will gain momentum,” said Prasad Koparkar, head of structured finance at Crisil. “Besides, yields on a ‘AAA’ securitised paper are 50-75 basis points higher compared with other ’AAA’ paper,” he added.

Read more in The Economic Times

Rating agencies gear up for IPO grading

Credit rating agencies are gearing up for increased activity following market regulator Sebi's decision to make grading of initial public offerings (IPOs) mandatory.

Crisil, the biggest of the four rating agencies in the country, plans to expand its team shortly. R Ravimohan, managing director, Crisil said around 20 companies were currently in talks with the company for IPO grading.

According to him, contrary to market perception, IPO gradings would not cost much to the issuers.

Ravimohan said Crisil would be charging 10 basis points of the amount to be raised with a ceiling of about Rs 10-15 lakh. Thus, even in the case of a mega-IPO, there would be a cap on fees, he noted.

Read more at Business Standard