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Detailed Rationale Crisil Ratings has assigned its ‘Provisional Crisil AA+ (SO)’ rating to Series A pass-through certificates (PTCs) issued by ‘Niveda Trust PTC June 2025’ under a securitisation transaction originated by Piramal Finance Limited (PFL; rated ‘CRISIL A1+’), backed by a pool of unsecured business loan receivables. The ratings are based on credit support available to PTCs, credit quality of the underlying pool receivables, PFL’s origination and servicing capabilities, and soundness of the transaction’s legal structure. Payment Structure: The transaction has a ‘PAR with turbo amortisation’ structure. The trust settled by the transaction’s Trustee, i.e. Catalyst Trusteeship Limited will issue Series A PTCs to investors in exchange for a purchase consideration equal to 90.0% of the pool principal at the time of securitisation. Series A PTC holders are promised timely interest payments on a monthly basis. Principal repayment, while expected on a monthly basis, is promised only on an ultimate basis by the instrument’s final maturity date. Adequacy of credit enhancement The investor payouts for PTCs are supported by cash collateral, subordination of over collateral principal, and subordination of excess interest spread (EIS). Every month, residual cashflows, after making expected and promised investor payouts, shall be utilised for accelerated redemption of PTCs. On a monthly basis, the cash collateral can be used to make the promised interest payments in case of a shortfall in collections from the pool to Series A PTC. On the Series A PTC final maturity date, the cash collateral can also be used to make the promised principal repayment in case of a shortfall in collections from the pool.
Credit enhancement available in the transaction structure for Series A PTC is as below:
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Key Rating Drivers & Detailed Description Strengths:
Weakness:
− Limited portfolio performance track record for the unsecured business loan book of PFL. Major disbursements have happened in the previous two fiscals and are yet to witness complete performance cycle.
− The unsecured business loan industry remains susceptible to risks arising out of socio-political issues and policy / regulatory changes. Such events can disrupt loan repayments of underlying borrowers. − Collections for unsecured business loans have been volatile across industry. For PFL there has been a dip in cumulative portfolio collections in recent quarters which has led to a rise in delinquency levels which could have a bearing on the collection performance of loans in the underlying pool. |
Liquidity: Strong Liquidity is strong given that the credit enhancement available in the structure is sufficient to cover losses exceeding 1.5 times the currently estimated base shortfalls. |
Rating Sensitivity factors Upward factors
Downward factors
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Quality of the asset pool and strength of cashflows The transaction is backed by receivables from a pool of unsecured business loans originated by PFL. The pool’s key characteristics as of the cut-off date (31-May-2025) are outlined below:
Assuming no prepayments, cashflow schedule results in subordination in the form of principal subordination and EIS amounting aggregating to to Rs 37.00 crore (26.2% of pool principal securitised). The portfolio performance of PFL 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; 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.
Additional disclosures for Provisional ratings:
Executed documents:
Other documents:
Additional documents, if any, executed for the transaction should also be provided along with the above documents. The provisional rating shall be converted into a final rating after receipt of transaction documents duly executed within 90 days from the date of issuance of the instrument. The final rating assigned post conversion shall be consistent with the available documents. In case of non-receipt of the duly executed transaction documents within the above-mentioned timelines, the rating committee of Crisil Ratings may grant an extension of up to another 90 days in line with its policy on provisional ratings.
Rating that would have been assigned in absence of the pending documentation: In the absence of documentation considered while assigning provisional rating as mentioned above, Crisil Ratings would not have assigned any rating.
Risks associated with provisional nature of credit rating: A prefix of 'Provisional' to the rating symbol indicates that the rating is contingent upon execution of certain documents by the issuer, as applicable. In case the documents received deviate significantly from the expectations, Crisil Ratings may take appropriate action including placing the rating on watch or a rating change, depending on status of progress on a case-to-case basis. In the absence of the pending documentation, the rating on the instrument would not have been assigned ab initio. |
About the company- Originator/Servicer profile Founded by Mr. Ajay Piramal, PEL is engaged in the financial services business through its subsidiaries.
In the financial services business, the company has three verticals: (i) real estate financing - lending to developers with established track record, with greater focus on providing loans for construction finance and lease rental discounting; (ii) Corporate Mid-Market Group that provides finance to mid-tier companies; and (iii) housing finance and other retail loans.
In 2022, the PEL group has undergone restructuring with the pharmaceutical business within PEL being carved out into a new entity -- PPL. Further, PHL Fininvest Pvt Ltd got merged into PEL, thus PEL is now an NBFC with PCHFL as its 100% subsidiary.
Key Financial Indicators: (Consolidated)
*annualised
A summary of key terms of servicer contract
As per indicative transaction terms, the key points on the role of the servicer to be covered as part of the transaction documents are as below:
The servicer shall receive servicing fees which shall be paid by the trustee in accordance with the Waterfall Mechanism as per the transaction documents.
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 ratings outstanding on instruments issued under 3 securitisation transactions backed by unsecured business loans initially originated by PFL (later on sold to PEL). The underlying pools in these transactions are being serviced by PFL. The cumulative collection efficiency in the underlying pools for these transactions are nearly in the range of 95.5%-97.5% as of May-2025 payouts. |
Any other information: Not Applicable |
Note on complexity levels of the rated instrument: |
Annexure - Details of Instrument(s)
^ISIN yet to be issued. #Indicates legal final maturity date for the instrument. Actual maturity date will depend on the level of collection shortfalls in the pool, the level of prepayments in the pool, and exercise of the clean-up call option. |
| Annexure - Rating History for last 3 Years | |||||||||||||||||||||||||||||||||||||||
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| All amounts are in Rs.Cr. | |||||||||||||||||||||||||||||||||||||||
Criteria Details
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