Sansar Trust July 2023 (Originator: Shriram Finance Limited)
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 September 2024 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 timely principal |
Detailed Rationale CRISIL Ratings has reaffirmed its rating for pass-through-certificates (PTCs) issued by ‘SANSAR TRUST JULY 2023’ at ‘CRISIL AAA (SO)’ for Series A1 and upgraded its rating to ‘CRISIL A (SO)’ from ‘CRISIL BBB+ (SO)’ for Series A2. The transaction is originated by Shriram Finance Limited (SFL; rated ‘CRISIL AA+/CRISIL PPMLD AA+/Stable/ CRISIL A1+’).
This securitization transaction is backed by receivables from two-wheeler and commercial vehicle loans originated by SFL. The rating is based on the credit enhancement available to the PTCs, the expected credit quality of underlying receivables, SFL’s origination and servicing capabilities, the transaction’s payment mechanism, and soundness of the transaction’s legal structure.
The pool has exhibited good collection performance as seen by strong collections ratios. The cumulative collection ratio for the pool is robust at 97.5%. This has led to minimal delinquencies in the pool as reflected in 90+ DPD of 0.6%. The healthy collection performance coupled with amortization of around 56.2% has led to an increase in the credit cover available to future PTC payouts from the cash collateral. |
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 initial Pool The securitisation transaction is backed by a pool of receivables from two-wheeler (89.1% of initial pool principal) and commercial loans (10.1% of initial pool principal) originated by SFL. As of the pool cut-off date (August 31, 2023), the pool loans had a weighted average seasoning of 6.3 months, a weighted average interest rate of 21.5%, a weighted average LTV ratio of 80.5%, a weighted average original tenure of 28.7 months, and an average original loan amount of Rs 0.84 lakh. The top 3 states (Karnataka, Tamil Nadu and Andhra Pradesh) contributed 47.7% of the initial pool principal. All the underlying pool loans were current on repayment as on the cut-off date.
Pool Performance Summary (as after September 2024 payouts)
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 SFL (erstwhile 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 83.78% stake in the former. Pursuant to the consummation of the transaction, Shriram Capital and SCUF ceased to exist.
SFL, incorporated in 1979, was registered with RBI as a deposit-taking, asset-financing non-banking financial company and predominantly provides financing for vehicles such as CVs (both pre-owned and new), tractors, and passenger vehicles. Erstwhile SCUF (now merged into SFL) was incorporated in 1986 and operated 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: SFL consolidated
*Gross Stage-3 estimated on combined basis for SFL and SHFL ^Pre-merger **annualised
Key Financial Indicators: SFL Standalone
^Pre-merger
Past rated pools CRISIL Ratings has ratings outstanding on 18 securitisation transactions backed by SFL-originated loans. CRISIL Ratings is receiving monthly performance reports pertaining to these transactions. The cumulative collection efficiency in the underlying pools for these transactions range from ~96% to ~100% as of September-2024 payouts, with 90+ delinquency remaining at or below 3.0% of the initial pool principal.
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 &No promised yield for Series A2 PTCs; any residual cashflows post payment to Series A1 PTCs is passed on to Series A2 PTCs |
| Annexure - Rating History for last 3 Years | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| All amounts are in Rs.Cr. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Criteria Details
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