Chennai-based IFMR Capital has announced the closure of what it claims as “India’s first Collaterised Loan Obligation (CLO)” transaction, post the issuance of the Securitisation Guidelines in 2006.

The non-banking finance company has in a release said that it has extended ₹114 crore of securitised loan to four NBFCs — Annapurna Microfinance Pvt Ltd, Zen Lefin Pvt Ltd (Capital Float), Essel Finance Business Loans Ltd and Home Credit India Finance Pvt Ltd — and passed on the pooled loans to a domestic mutual fund investor through the securitisation route.

“This form of secondary sale is especially useful to provide capital market investors indirect exposure to a range of well-performing financial inclusion focused NBFCs,” Kshama Fernandes, Chief Executive Officer, IFMR Capital, said.

Second product

This incidentally is the second product structure by IFMR Capital in the current fiscal.

“CLOs are a form of securitisation, where corporate loans are pooled together and later passed on to different classes of investors in various tranches. In this instance, the institutional loans extended to the four NBFCs were assigned to an SPV. The SPV issued Pass Through Certificates (PTCs) that were backed by receivables from these loans,” Fernandes said, adding that the CLO product could play a critical role in developing the secondary market for loans.

The four NBFCs have individual shares of 20-30 per cent in the overall loan pool.

Established in 2008, IFMR Capital has over the last decade raised over ₹46,000 crore debt for its clients.

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