SANSAR TRUST JAN 2023 (Originator: Shriram Finance Limited) 'CRISIL AAA (SO)' rating reaffirmed on Series A PTCs; Second loss facility rating upgraded to 'CRISIL A (SO) Equivalent'
Rating action:
Note: None of the Directors on CRISIL Ratings Limited’s Board are members of rating committee and thus do not participate in discussion or assignment of any ratings. The Board of Directors also does not discuss any ratings at its meetings. 1 crore = 10 million Refer to annexure for Details of Instruments & Bank Facilities $After August 2023 payout #Indicates door to door tenure; actual tenure will depend on the level of prepayments in the pool and exercise of the clean-up call option &Series A PTC holders are entitled to receive timely interest and ultimate principal
Detailed Rationale CRISIL Ratings has reaffirmed its ‘CRISIL AAA (SO)’ rating for Series A pass-through-certificates (PTCs) issued by ‘SANSAR TRUST JAN 2023’ and upgraded its credit opinion to ‘CRISIL A (SO) Equivalent’ from ‘CRISIL BBB+ (SO) Equivalent’ for the second loss facility. The transaction is backed by receivables from used and new tractors, commercial vehicles (CV), construction equipment (CE) and passenger vehicles (PV) loans originated by Shriram Finance Limited (SFL; rated ‘CRISIL AA+/CRISIL PPMLD AA+/Stable/CRISIL A1+’). The rating/ credit opinion is based on the credit support available to the PTCs, credit quality of underlying receivables, SFL’s origination and servicing capabilities, the payment mechanism, and soundness of the transaction’s legal structure.
The transaction has exhibited healthy collection efficiency and has amortised by 16.7% in 6 months since securitisation. The cumulative collection ratio for the pool is robust at 97.9%. This has led to minimal delinquencies in the pool as reflected in 0+ overdue of 0.4%. |
Key Rating Drivers & Detailed Description Strengths:
Weakness:
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Liquidity: Strong Liquidity position is strong given that the credit enhancement (internal and external combined) in the structure is above 1.5 times the estimated base shortfalls on the residual pool cash flows. |
Rating Sensitivity factors Upward factors:
Downward factors:
These aspects have been factored by CRISIL in its rating analysis. |
About the Pool The securitisation transaction is backed by a pool of from used and new tractors, commercial vehicles (CV), construction equipment (CE) and passenger vehicles (PV) loans originated by Shriram Finance Limited. The pool has amortised 16.7% over the past 6 payouts. The top 3 states (Tamil Nadu, Maharashtra and Karnataka) account for 38.8% of the pool principal. The average ticket size of pool loans is Rs 5.4 lakh, and the weighted average interest rate and LTV (at disbursement) for pool loans was 14.9% and 68.4% respectively.
Pool Performance Summary (as after August 2023 payouts)
CR = Monthly collections in the pool / Monthly billings CCR = {Total collections in the pool/(Total billings + opening overdues at the time of securitisation)} 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
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About the originator Following the consummation of the merger of SCUF and demerged undertaking of Shriram Capital Limited with STFCL, the company has been renamed to Shriram Finance Ltd (SFL). Shriram Housing Finance Ltd (SHFL) continues to operate as a subsidiary of SFL which holds around 85.02% stake in the same. Pursuant to the consummation of the transaction, Shriram Capital and SCUF cease to exist.
STFCL, incorporated in 1979, was registered with RBI as a deposit-taking, asset-financing non-banking financial company. STFCL provides financing for vehicles such as CVs (both pre-owned and new), tractors, and passenger vehicles.
SCUF, was incorporated in 1986 and predominantly operates in the retail financing segment with a focus on small enterprise loans, two-wheeler financing, gold loans, housing loans and others (auto and personal loans).
Key Financial Indicators: STFCL Standalone
Key Financial Indicators: SCUF Consolidated
Key Financial Indicators: SFL consolidated
*Gross Stage-3 estimated on combined basis for SFL and SHFL
Past rated pools CRISIL Ratings has ratings outstanding on 23 securitisation transactions originated by SFL. CRISIL is receiving monthly performance reports pertaining to these transactions. |
Any other information: Not applicable |
Note on complexity levels of the rated instrument: |
Annexure - Details of Instrument(s)
#Indicates door to door tenure. Actual tenure will depend on the level of prepayments in the pool and exercise of the clean-up call option. ^Additionally, Internal credit support in the form of scheduled EIS assuming zero prepayments aggregating Rs 38.24 crore for Series A PTCs *Includes a second loss facility of Rs. 12.33 crore |
| Annexure - Rating History for last 3 Years | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| All amounts are in Rs.Cr. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Criteria Details
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