Detailed Rationale

CRISIL Ratings has reaffirmed its rating on Series A PTCs at ‘CRISIL AAA (SO)’ for the securitisation transaction issued by ‘HDFC Trust 2014’. The pool is backed by home loan receivables originated by Housing Development Finance Corporation Limited (HDFC; rated ‘CRISIL AAA/Stable/CRISIL A1+’).

The rating is based on the credit support available to the PTCs, credit quality of underlying receivables, HDFC’s origination and servicing capabilities, the payment mechanism, and soundness of the transaction’s legal structure. The ratings are driven by the credit support available to the structure on account of the significant amortization and healthy pool performance.

The transaction has a ‘par’ structure with timely interest and timely principal payouts promised to the investor.

109 months post securitization, the pool has exhibited strong collection performance with a cumulative collection ratio of 99.8% and 90+ dpd on the pool at 0.3%. This has resulted in the cash collateral cover build up to 51.0% on the outstanding PTC principal.

About the Originator

HDFC, a housing finance company, was incorporated in 1977; its initial shareholders included International Finance Corporation, Washington, and the Aga Khan Trust. As on December 31, 2022, AUM stood at Rs 7,01,485 crore of which 82% consisted of loans to individuals. Loans to corporate entities, lease rental discounting, and construction finance accounted for 4%, 6% and 8%, respectively. The company also has a strong presence in the life insurance, general insurance, asset management and education financing businesses through its subsidiaries - HDFC Life Insurance Company, HDFC Ergo, HDFC AMC and HDFC Credila, respectively. For fiscal 2022, HDFC, on a standalone basis, reported a profit after tax (PAT) of Rs 13,742 crore and total income (net of interest expense) of Rs 21,251 crore, against PAT and total income (net of interest expense) of Rs 12,027 crore and Rs 19,561 crore, respectively, for the previous fiscal. For the nine months ended December 31, 2022, reported PAT on a standalone basis stood at Rs 11,814 crore on total income (net of interest expense) of Rs 17,722 crore as against Rs 10,042 crore and Rs 15,713 crore, respectively, for the corresponding period previous fiscal. For fiscal 2022, on a consolidated basis, HDFC reported a PAT of Rs 24,042 crore and a total income (net of interest expense) of Rs 1,08,738 crore, against Rs 20,488 crore and Rs 1,09,990 crore, respectively, for the previous fiscal. For the nine months ended December 31, 2022, reported PAT on a consolidated basis stood at Rs 19,695 crore and total income (net of interest expense) was Rs 81,962 crore, against Rs 17,150 crore and Rs 80,603 crore, respectively, for the corresponding period previous fiscal.

About the Pool

The pool consists of HL contracts. At the time of securitisaiton, the weighted average seasoning of the pool was 41.5 months, and the pool was diversified, with the top three states accounting for 63.3% of the pool principal, with a weighted average loan-to-value ratio of 77.8% and average ticket size of Rs. 11.6 lakhs.

Pool Performance Summary (as after April 2023 payout)

!CCR = {Total collections in the pool/(Total billings + opening overdues at the time of securitisation)}
^MCR = Monthly collections in the pool / Monthly billings

*TCR = The minimum cumulative collection ratio required on a pool’s future cash flows, to be able to service the investor payouts on time

Counterparty Details

Key Financial Indicators

Any other information: Not applicable

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