'Transaction value in securitisation mkt slide to Rs 30,250cr'

NEW DELHI: The value of transactions in the securitisation market slumped 20 per cent to Rs 30,250 crore in the last fiscal, according to ratings agency ICRA.

In the financial year ended March 2012, the amount stood at Rs 37,876 crore.

"Issuance volume of rated transactions in the Indian securitisation market (including rated bilateral assignments) fell by 20 per cent in FY 2013 over the previous fiscal to Rs 30,250 crore," ICRA said in a report today.

As per the agency, the decline in value was mainly due to the fact that "single corporate loan securitisations completely stopped while some bilateral loan pool assignments were done on an unrated basis".

Rated transactions in the securities market are those which carry ratings assigned by various agencies.

Generally, securitisation refers to pooling of loans and then issuing marketable securities against them. The dynamics are expected to alter again following clarity in the taxation regime for securitisation in the latest Union Budget, ICRA said.

"The new tax treatment should open the path for mutual funds to invest in securitisation transactions.

"Nevertheless, the same is feared to be a negative for banks, since there could be a proportionate disallowance of expenses incurred in respect of such investment--thus having a significant impact on the post-tax yield on the transactions," it added.