'Rising COVID cases to subdue securitisation market' says ICRA

NEW DELHI: Rising COVID cases are expected dampen the securitisation market, affecting fund-raising for NBFCs in the near term, ratings agency ICRA said.

"Despite the healthy activity seen in the securitisation market in Q4FY2021, the rising COVID-19 cases may again create uncertainty among the investors," AbhishekDafria, Vice President and Head, Structured Finance Ratings at ICRA, said in a report.

"On a positive front, the lockdowns announced by a few state governments at present are less restrictive in comparison to the nationwide lockdown seen last year. Nevertheless, an unabated increase in the COVID cases is likely to bring about fears of harsher lockdowns which could impact the asset quality of retail loans especially for unsecured loans such as in the microfinance sector."

According to Dafria, the rising COVID cases in turn would impact the fund-raising ability of the NBFCs and HFCs through securitisation of their assets. "Successful implementation of the vaccination programme and ability of government agencies to arrest the rising infections would remain critical in the near term." (IANS)

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