Liquid Gold Series 23 (Originator: IIFL Finance Limited) 'Crisil AA+ (SO)' for Series A PTCs, ‘Crisil A (SO)’ for Series B PTCs and ‘Crisil BBB+ (SO)' for Equity Tranche PTCs Converted From Provisional Ratings To Final Ratings
Note: None of the Directors on Crisil Ratings Limited’s Board are members of rating committee and thus do not participate in discussion or assignment of any ratings. The Board of Directors also does not discuss any ratings at its meetings. 1 crore = 10 million Refer to annexure for Details of Instruments & Bank Facilities
Detailed Rationale Crisil Ratings has converted its provisional ratings to final ratings of ‘Crisil AA+ (SO)’ for Series A Pass-Through Certificates (PTCs), ‘Crisil A (SO)’ for Series B PTCs and ‘Crisil BBB+ (SO)’ for Equity Tranche PTCs, issued by ‘Liquid Gold Series 23’ under a securitisation transaction backed by gold loan receivables originated by IIFL Finance Limited (IIFL Finance: rated ‘Crisil AA/Crisil AA-/Crisil PPMLD AA/Stable/Crisil A1+’).
This securitisation transaction is backed by gold loan receivables originated by IIFL Finance. The rating is based on the credit support available to the PTCs, the credit quality of the underlying pool receivables, IIFL Finance’s origination and servicing capabilities, and soundness of the transaction’s legal structure.
Crisil Ratings has now received the final legal/executed documents for this transaction. Amended and restated declaration of trust, Assignment Agreement, Collection and Servicing and Security’s Agent Agreement, FLCF Agreement and Power of attorney were issued in place of Trust Deed/Declaration of Trust, Deed of Assignment, Cash Collateral Agreement, Accounts Agreement and Servicing Agreement. However, this is a change in the nomenclature of the transaction documents and does not have any impact on the credit profile of the instrument. These executed documents are in line with terms of the transaction envisaged when provisional rating was assigned. Hence, Crisil Ratings has converted the provisional rating to a final rating.
Legal Documents
Other Documents
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Payment structure The transaction has a ‘par with turbo amortisation’ structure. The trust settled by the transaction’s trustee has issued Series A PTCs in exchange of a purchase consideration equal to 89.0% of the pool principal , Series B PTCs equal to 9.00% of the pool principal & Equity Tranche PTCs equal to 2.00% of the pool principal at the time of securitisation, respectively.
The PTCs are issued under a replenishment structure with a door-to-door tenure of 33 months, i.e final legal maturity of PTC is January 2029. Of this, the first 6 months serve as the replenishment period followed by the amortisaton period and tail period. Maximum maturity of the loans that can be added in replenishing period is till June 2028 (payout July 2028), hence there is 6-month tail period post maturity of the underlying loans.
In the replenishment period: There are no interest and principal payouts expected to Series A PTCs. Cashflow available will be utilised to purchase additional loans, that meet pre-defined eligibility criteria, such that the outstanding pool principal of eligible loans plus cash lying in Collection and Payout(C&P) account is at least 1.10 times the outstanding PTC principal plus accrued interest of Series A PTCs. Cover falling below this level will be a trigger event. Scheduled payout to investors will start from November 2026. In case of a replenishment termination event (defined at the time of issuance of PTCs), the replenishment period shall end immediately, and amortisation of the transaction shall start.
In the amortisation period: Till the time Series A PTC are outstanding, collections from underlying receivables will be used to pay senior cost and expected interest to Series A PTC holders. Subsequently, 100% collections will be used to pay principal to Series A PTC holders. Till the time Series A PTC are outstanding, no payment will be made to Series B PTC & Equity tranche PTC.
Once Series A PTC are fully paid, collections from underlying receivables will be used to pay senior cost and expected interest to Series B PTC holders. Subsequently, 100% collections will be used to pay principal to Series B PTC holders. Till the time Series B PTC are outstanding, no payment will be made to Equity tranche PTC.
Once Series A PTC & Series B PTC are fully paid, collections from underlying receivables will be used to pay senior cost and subsequently, 100% collections will be used to pay principal to Equity tranche PTC.
On the Series A PTCs , Series B PTCs and Equity tranche PTCs final legal maturity date, the cash collateral can be used to make the promised interest and principal repayment in case of a shortfall in collections from the pool. Also, credit enhancement shall be utilized first for Series A PTCs and then for Series B PTCs and then for Equity tranche PTCs. The transaction has an Ultimate Interest and Ultimate Principal (UIUP) structure based on the amortisation schedule of the final crystallised pool, additionally there is a provision for turbo amortisation during this period. |
Adequacy of credit enhancement The investor payouts for Series A PTCs are supported by cash collateral, subordination of Series B PTCs tranche, Equity tranche PTCs and subordination of excess interest spread (EIS). For investor payouts for Series B PTCs are supported by cash collateral, subordination of Equity tranche PTCs and subordination of excess interest spread (EIS). For investor payouts for Equity tranche PTCs are supported by cash collateral and subordination of excess interest spread (EIS).
Credit enhancement available in the transaction structure is as below:
Based on Crisil Ratings assessment, the total credit enhancement available in the transaction (internal – in the form of EIS and principal subordination; and external – in the form of cash collateral) provide loss absorption against stressed shortfalls in the pool, commensurate with the rating assigned to the PTCs. |
Key Rating Drivers & Detailed Description Strengths:
Weaknesses:
Crisil Ratings has adequately factored these aspects into its rating analysis. |
Rating Sensitivity factors Upward factors
Downward factors
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Liquidity Strong for Series A PTCs & Series B PTCs, Adequate for Equity Tranche PTCs Liquidity is strong for Series A PTCs & Series B PTCs given that the credit enhancement available in the structure is sufficient to cover losses exceeding 1.5 times the base case shortfalls in the pool.
Liquidity is adequate for Equity Tranche PTCs given that the credit enhancement available in the structure is sufficient to cover losses exceeding 1.1 times the base case shortfalls in the pool.
Crisil Ratings has adequately factored these aspects into its rating analysis. |
Quality of the asset pool and strength of cashflows The transaction is backed by receivables from a pool of gold loans originated by IIFL Finance. The pool’s key characteristics as of the cut-off date (April 29, 2026) are outlined below:
Pool loans have seen a weighted average holding period (number of months from CERSAI date) of 3.0 months prior to securitisation, during which the total disbursed amount for pool loans has amortised by 7.5%. The average disbursement amount for pool loans was Rs 72,727 and weighted average IRR is 18.5% and a weighted average original tenure of 23.9 months. None of the pool loans had any overdues as of the cut-off date.
Assuming no prepayments, cashflow schedule results in Scheduled subordination amounting to 76.49 INR crore (34.0% of the initial pool principal), scheduled subordination to Series B PTCs amounting to 52.55 INR crore (23.4% of the initial pool principal) and scheduled subordination to Equity Tranche PTCs amounting to 48.05 INR crore (21.4% of the initial pool principal). The portfolio performance of IIFL Finance has been highlighted in the Rating assumptions section below. Based on Crisil Ratings assessment, the total credit enhancement available in the transaction (internal – in the form of EIS and principal subordination in the form of Junior tranche; and external – in the form of cash collateral) provide loss absorption against stressed shortfalls in the pool, commensurate with the rating assigned to the PTCs. Crisil Ratings has run sensitivities on the quantum and timing of recovery and has adequately factored the same in its analysis |
Rating assumptions Background: PTC investors are taking a direct exposure on the repayment ability of the underlying borrowers in the pool. Credit risk in the transaction is factored through the base case shortfalls expected on the portfolio, which are further adjusted for pool specific characteristics.
To assess the base case shortfalls for the transaction, Crisil Ratings has analysed moving portfolio delinquency for gold loan portfolio provided by IIFL Finance till December 2025. The 90+ dpd for the gold loan portfolio of IIFL Finance is 0.4% as of December 2025.
Base case shortfalls on the portfolio are adjusted based on trajectory of principal repayment, recovery from peak losses, pool characteristics – which includes seasoning profile and repayment track record, parameters such as original tenure, interest rate, loan-to-value, etc. Crisil Ratings has additionally factored risk arising from borrower & geographic concentration in the pool.
Prepayment is a form of market risk which will result in the reduction of excess interest spread in the transaction. Prepayment risk has been assessed based on historically observed levels of prepayments for portfolio and similar pools.
Assumptions:
Key Eligibility criteria for loan assets in the pool (including new loans added during replenishment period): During the Replenishment Period, all collections from pool shall be used by the Trust to purchase additional receivables from Originator, such that the outstanding pool principal of eligible loans plus cash lying in C&P account is at least 1.10 times of the principal outstanding on Series A PTCs plus accrued interest. These additional receivables shall meet the same Eligibility Criteria as applicable for the receivables that were part of the underlying pool at initiation of the transaction.
Additional criteria for the replenished pool shall be:
Trigger events for termination of replenishment period:
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About the company- Originator/Servicer profile IIFL Finance is the listed holding company of the IIFL Finance group and is registered as a systemically important non-deposit-taking, non-banking financial company. The group offers various retail lending products, including gold loans, home loans, LAP, digital loans and microfinance loans, which are the core segments and form 98% of the AUM. Capital market-based lending (margin funding and loans against shares) and construction and developer finance form the balance of the AUM. |
Key Financial Indicators: IIFL Finance (consolidated; Crisil Ratings-adjusted numbers)
Key financial indicators: IIFL Finance (standalone; Crisil Ratings-adjusted numbers)
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Quality and experience of servicer IIFL Finance will continue to service loans assigned to this trust. IIFL Finance has originated several securitisation transactions. Servicing has been done, and reports have been shared across all these transactions in a timely manner. |
Risks and concerns for investors and mitigating factor: Based on Crisil Ratings’ assessment, the total credit enhancement available in the transaction (internal – in the form of EIS; and external – in the form of cash collateral) together can mitigate against shortfalls in collection from the pool even after stressing them commensurate with the rating assigned to the PTCs. Crisil Ratings has adequately factored key risks in the transaction including Credit & Market (as highlighted in rating assumptions section), Counterparty and Legal risks. Legal risks are assessed based on detailed analysis of transaction documentation. Risk factored from counterparties are mentioned in the table below: |
Counterparty details
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A summary of key terms of servicer contract The key points on the role of the servicer covered as part of the transaction documents are as below:
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Provision for appointment of back-up servicer: The Trustee (acting on the instructions of the investors) as per the terms of the Servicer Agreement and upon the occurrence of Servicer’s Event of default, shall retain the right to appoint an alternate servicer. |
Performance of outstanding rated transactions Crisil Ratings has 11 ratings outstanding on instruments issued under securitisation transactions backed IIFL Finance -originated loans. |
Any other information: Not applicable |
Note on complexity levels of the rated instrument: |
Annexure - Details of Instrument(s)
* - Coupon rate in XIRR is 8.80% |
| Annexure - Rating History for last 3 Years | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Annexure: List of instruments and names of regulators of the instruments As required by SEBI CRA Circular dated Feb 10, 2026, a list of activities or instruments falling under the purview of various FSRs, along with the names of respective FSRs, is being disclosed below:
* Includes securitisation transactions involving assignee payout, acquirer's payout. ~ The rated instrument may involve issuance of different instruments such as debt securities (listed or otherwise), bank loans, commercial paper (listed or otherwise), etc. The regulator of the instrument may accordingly be SEBI, RBI or MCA and can only be determined upon issuance. In PRs subsequent to issuance(s), Crisil Ratings Limited shall separately capture the rated quantum details along with names of respective regulators. ^ Includes bank facilities such as liquidity facility, second loss facility that are part of securitisation transactions. # There is no instrument being rated and hence, Regulator of the Instrument is not applicable. The rating scale and definitions are being followed as stipulated in SEBI Master Circular for CRAs. @ These ratings were assigned during regulatory regime prior to introduction of SEBI CRA Circular dated Feb 10, 2026 and the investor side regulators have accordingly been included.
Note: Kindly note that for activities or instruments falling under the purview of FSRs other than SEBI, the grievance/dispute redressal mechanisms and investor protection mechanisms provided by SEBI shall not be available. |
Criteria Details
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