Non-banking financial company Home Credit India Finance Pvt. Ltd, which is part of The Netherlands-based Home Credit BV, has raised Rs 153 crore ($23.5 million) in a consumer durable loan securitisation deal.
The issue has been subscribed by private lender DCB Bank Ltd and NBFC IFMR Capital, Home Credit India said in a statement.
“The market for loan securitisation transactions in India has been growing steadily over the last few years, both in volume and ticket size. The consumer durables loan securitisation is a milestone transaction for Home Credit India and reflects our commitment in helping broaden the market for such transactions,” said Mariusz Dabrowski, chief financial officer of Home Credit India.
“The transaction is an example of using IFMR Capital’s structuring expertise to create innovative products that suit the needs of our clients. It was a challenging securitisation deal as it was a new category of asset class with a very short residual tenure,” said Kshama Fernandes, chief executive officer of IFMR Capital, which acted as the arranger for the issue.
This is the third loan securitisation transaction for Home Credit India in the current financial year. In July, the company raised Rs 41.3 crore in a two-wheeler loan securitisation deal. It recently completed another two-wheeler loan securitisation through which it raised Rs 45.3 crore.
Consumer durable loans are typically shorter tenure loans maturing in six to 10 months and are used to fund the purchase of assets like mobile phones and home appliances through tie-ups with various retail stores.
Loan securitisation is a process in which the underlying pool of assets is structured or packaged and sold as financial instruments to investors either directly or through a special purpose vehicle.
In 2012, Home Credit Group acquired Rajshree Auto Finance Pvt. Ltd and in 2013 it rechristened itself as Home Credit India Finance Pvt. Ltd. Home Credit B.V. is the holding company of Home Credit India Finance.
Home Credit India provides loans for two-wheelers and consumer durables such as mobile phones, laptops and tablets. It also provides cash loans. It has operations in 89 cities across 19 states in the country.
As of 30 September 2017, Home Credit India had a loan book worth Rs 3,200 crore with around 4.2 million customers, according to a company spokesperson.