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Securitization in India: Opportunities and Obstacles

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Securitization in India: Opportunities and Obstacles
Securitization in India – Opportunities & Obstacles
A Discussion paper

V. Sridhar

PGP 2002, IIM Calcutta

Securitization in India – Opportunities & Obstacles

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Acknowledgement
I would like to thank Mr. Manoj Dengla from ICICI Structured Products Group whose valuable insights have made this paper possible. I am also thankful to Mr. Pranay Agrawal and Mr. V. Srikanth of Fractal Technologies Ltd. for narrating their securitization experience.

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Securitization in India – Opportunities & Obstacles

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Abstract
Securitization has emerged globally as an important technique for bundling assets and segregating risks into marketable securities. This paper discusses the present nascent state of the securitization market in India, its potential and attempts to identify what needs to be done by various stakeholders in this market for securitization to grow to its full potential in India.

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Securitization in India – Opportunities & Obstacles

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Table of Contents
ACKNOWLEDGEMENT................................................................................. 2 ABSTRACT................................................................................................. 3 INTRODUCTION ........................................................................................ 5 SECURITIZATION IN INDIA ....................................................................... 6 NEED FOR SECURITIZATION IN INDIA ....................................................... 6 CURRENT SECURITIZATION ACTIVITY IN INDIA......................................... 7 ASSET BACKED SECURITIES (ABS)..................................................................... 7 MORTGAGE BACKED SECURITIES (MBS, RMBS, CMBS)............................................ 8 COLLATERALIZED DEBT OBLIGATIONS (CDO, CLO, CBO) .......................................... 8 ASSET BACKED COMMERCIAL PAPER (ABCP) ..........................................................


References: [1] What SEBs Owe - Out standing dues to central utilities, http://www.indiapoweronline.com/Scripts/GNT006C1.ASP?ArtID=450&CatID =1&SecID=14 [2] P.P. Vora (2001), “NHB - Promoting A Sound, Healthy, Viable And Efficient Housing Finance System”, http://www.shilpabichitra.com/v039.htm [3] Modak, Anand, (2001), “Securitization - A boon for Investors and Borrowers, Investime, September 2001”, http://www.valuemoney.com/new/sec.pdf [4] Ghosh, T P, “Innovations in asset-backed securities”, http://www.financialexpress.com/fe/daily/19990331/fex31002.html [5] Standard and Poor, “Global CBO/CLO Criteria”, http://www.standardandpoors.com/ResourceCenter/RatingsCriteria/Structure dFinance/articles/pdf/globalcboclo99.pdf [6] Notes from http://www.vinodkothari.com 11
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