March 15, 2013
CRISIL assigns ‘CRISIL AA+ (SO)’ for Indiabulls Housing Finance Limited’s securitisation transaction

Details Yield Terms Issue Size (Rs. Million) Tenure (Months)# Rating Credit-cum-Liquidity Enhancement (Rs. Million)^
Series A PTCs Floating$ 1186.2 352 CRISIL AA+ (SO) 136.4

#Actual tenure will depend on the level of prepayments in the pool and the exercise of clean-up call option
^Additionally, scheduled excess interest spread, amounting to around Rs.489.2 million (assuming zero prepayments), provides credit support to the PT
$Linked to the prime lending rate of investor

CRISIL has assigned its ‘CRISIL AA+ (SO)’ rating to the pass-through certificates (PTCs) issued by Innovation Trust III Dec 12, which are backed by home loan receivables originated by Indiabulls Housing Finance Ltd (IHFL). The rating is based on the credit quality of the pool cash flows, IHFL’s origination and servicing capabilities, the transaction’s credit enhancement and payment mechanism, and the soundness of the transaction’s legal structure.

The receivables arise from a pool of home loans originated by IHFL. The transaction has a ‘par’ structure. IHFL will assign the pool to Innovation Trust III Dec 12, managed by IDBI Trusteeship Services Ltd, which will issue PTCs for investors. The PTCs receive support from the stipulated cash collateral and the excess interest spread.

About the Pool
The pool consists of home loans with weighted average seasoning of 22.5 months. The pool is geographically diversified, with the top three states in the pool together accounting for 51.1 per cent of the principal. All the contracts in the pool are current on payments as on the pool cut-off date, with a weighted average loan-to-value ratio of 60.7 per cent and ticket size of Rs.1.8 million.

About the Originator
Indiabulls Financial Services Ltd (IBFSL), established in January 2000, is a systemically important non-banking financial company. The company is focused on secured asset classes, such as mortgages, commercial vehicle, and commercial credit loans. IBFSL has now been reverse merged with IHFL and given that majority of IBFSL’s business pertains to mortgage-related lending, post the merger, IHFL will continue to operate as a housing finance company registered with National Housing Bank. At a consolidated level, IBFSL had assets under management of Rs.275.21 billion as on March 31, 2012, an increase from Rs.198.25 billion as on March 31, 2011.

IHFL, a housing finance company and a wholly owned subsidiary of IBFSL, is registered with the National Housing Board (NHB). For 2011-12, IHFL reported a profit after tax of Rs.2.49 billion on a total income of Rs.8.04 billion.

For 2011-12, IBFSL, on a consolidated basis, reported a PAT of Rs.9.98 billion (after minority interest) on a total income of Rs.38.46 billion; the company reported a PAT of Rs.7.4 billion on a total income of Rs.25.1 billion for 2010-11.

Both, IBFSL and IHFL have outstanding rating of ‘CRISIL AA/ Stable/CRISIL A1+’.

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March 15, 2013