BIZ-MUTHOOT-SECURITISATION

Muthoot Pappachan group's

micro-lending arm raised Rs 561.7 crore through asset

securitisation in the December quarter, when the non-bank

lending segment was facing huge troubles with liquidity.

With this, the total amount raised through

securitisation by the IPO-bound Muthoot Microfin has crossed

Rs 1,300 crore during the first nine months of the fiscal.

"Securitisation helps us raise funds for expansion

and leverage our capital efficiently to help maximise returns

for shareholders," chief executive Sadaf Sayeed said.

Securitisation refers to transactions wherein a lender

sells a portfolio of future receivables.

Commercial banks wanting to meet their priority sector

lending requirements have bought the portfolio, a statement

from the company said, adding public sector banks have bought

Rs 845 crore of its portfolio this fiscal while the rest was

snapped up by private sector banks.

Its peer Manappuram Finance's micro-lending subsidiary

Asirvad Microfinance had recently securitised over Rs 611

crore of assets during the current fiscal.

Securitisation by non- bank lenders and housing

finance companies during the first nine months of the fiscal

shot up to Rs 1.44 trillion from the Rs 84,000 crore in the

year ago period as these lenders faced liquidity troubles,

according to domestic ratings agency Icra.

The funds raised through this route help such

companies meet their repayment obligations.

Stating that all the transactions undertaken by his

company are through the direct assignment route, Sayeed said

it is a win-win where NBFCs are able to raise resources while

banks are open to it as it doesn't qualify as exposure to the

troubled NBFCs.

The company, which has a network in 16 states serving

1.3 million borrowers, said it is likely to come up with a

public issue in the near future.