PLATINUM TRUST JAN 2026-TRANCHE I

(Originator: Cholamandalam Investment and Finance Company Limited)

‘Crisil AAA (SO)’ for Series A PTCs and ‘Crisil A (SO) Equivalent’ for Second Loss Facility Converted from Provisional Ratings to Final Ratings

 

Rating Action

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

* As after April 2026 payouts

& Series A PTC holders are entitled to receive timely interest and timely principal

$ Additionally, scheduled excess interest spread (EIS) amounting to Rs 61.88 crore (assuming zero prepayments) also provides credit support to PTCs

# Includes a second loss facility of Rs 19.30  crore

^ Indicates door to door tenure. Actual tenure will depend on the level of prepayments in the pool, and exercise of the clean-up call option

Detailed Rationale

Crisil Ratings has converted the provisional rating/credit opinion on Series A Pass-Through Certificates (PTCs) to a final rating of ‘Crisil AAA (SO)’ and ‘Crisil A (SO) Equivalent’ on the Second Loss Facility issued by ‘PLATINUM TRUST JAN 2026-TRANCHE I’ This securitization transaction is backed by receivables from vehicle, construction equipment and tractor loans originated by Cholamandalam Investment and Finance Company Limited (CIFCL; rated ‘Crisil A1+’).

 

The rating/credit opinion is based on the credit support available to the PTCs, credit quality of underlying receivables, CIFCL’s origination and servicing capabilities, the payment mechanism, and soundness of the transaction’s legal structure.

 

Crisil Ratings has now received the final legal/executed documents for this transaction. Declaration of trust and Deed of assignment of receivables in the process of securitisation was executed in place of Trust Deed and Deed of assignment respectively. However, these changes are not material in nature and does not have any impact on the credit profile of the instrument.

 

The cash collateral amount has been increased to Rs 53.07 crore (11.0% of pool principal). This is split into first loss facility and second loss facility of Rs. 33. 77 Crore (7.0% of pool principal) and Rs. 19.30 Crore (4.0% of pool principal) respectively. This cash collateral enhancement is commensurate with the existing ratings of the ‘Crisil AAA (SO)’ for Series A PTCs and credit opinion of ‘Crisil A (SO) Equivalent’ for the second loss facility.

 

The other terms of the 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

• Declaration of Trust Deed
• Deed of Assignment of receivables in the process of securitization
• Power of Attorney
• First Loss Credit Facility Agreement
• Second Loss Credit Facility Agreement

 

Other Documents

• Information Memorandum
• Legal Opinion
• Auditors Certificate
• Originator’s Representation and Warranties Letter
• Trustee Awareness Letter

Payment structure

The transaction has a ‘Par with Excess Interest Spread (EIS)’ structure. Interest payments to Series A PTCs are promised on a monthly basis, principal payments while expected on the monthly basis are promised by the maturity date of the transaction. The cash collateral would be used to meet shortfalls in monthly promised Series A PTCs interest payout and for the principal repayment of Series A PTCs on the maturity as set out in the waterfall mechanism.

 

Investor payouts for Series A PTCs are supported by cash collateral, and subordination of excess interest spread (EIS). The residual cashflows or EIS cannot be used to top-up utilised external cash collateral. Residual cashflows will flow back to the originator. CIFCL will continue to service loan contracts in the pool as the servicing agent.

 

Crisil Ratings has estimated base case shortfalls in the pool at 3.5%-5.5% of cash flows. These shortfalls are further stressed to evaluate the adequacy of credit enhancement and arrive at the rating of PTCs. The total credit enhancement available in the transaction (internal – in the form of EIS; 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.

Adequacy of credit enhancement

The investor payouts for PTCs are supported by cash collateral and subordination of excess interest spread (EIS).

 

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 A1 PTCs.

 

Credit enhancement available in the transaction structure to support PTC payouts are described below:

 

• External credit enhancement of Rs 53.07 crore (11.0% of the pool principal) of which first loss facility of Rs 33.77 crore (7.0% of pool principal) is in the form of a fixed deposit and second loss facility of Rs 19.30 crore (4.0% of pool principal) is in the form of a fixed deposit / bank guarantee.

 

• Internal credit enhancement from subordination of scheduled EIS amounting to Rs 61.88 crore (12.8% of pool principal securitised, as of the pool cut-off date, assuming zero prepayments).

Key Rating Drivers & Detailed Description

Strengths:

• Credit enhancement available in the structure:
  •                  Credit collateral of Rs 53.07 crore (11.0% of the pool principal) provides credit support to Series A PTCs. The PTCs also benefit from internal credit support through scheduled EIS (assuming zero prepayment) aggregating to Rs 61.88 crore (12.8% of pool principal).
• Repayment track record of pool borrowers:
  •                  The pool has a weighted average seasoning of 10.2 months considering the pool cut-off date of January 31, 2026.

 

Weakness:

• Higher LTV contracts in pool
  •                     23.6% of the pool principal are from contracts having LTV higher than 90% while the weighted average LTV of the pool is 81.3%
• Overdue contracts in the pool
  •                  Contracts accounting for 6.8% of the pool principal outstanding are in the overdue bucket of 1-30 days as off the cut off date (January 31,2026)

 

Crisil Ratings has adequately factored these aspects in its rating analysis.

Rating Sensitivity factors

Upward factors

• For Series A PTCs : None, given the credit ratings on the Series A PTCs are currently at the highest level.
• For Second Loss Facility: Credit enhancement (based on both internal and external credit enhancements) available in the structure exceeding 1.7 times the estimated base case shortfalls on the residual cash flows of the pool

 

Downward factors

• For Series A PTCs: Credit enhancement (based on both internal and external credit enhancements) falling below 2.7 times the estimated base case shortfalls.
• For Second Loss Facility: Credit enhancement (based on both internal and external credit enhancements) falling below 1.5 times the estimated base case shortfalls.
• A sharp downgrade in the rating of the servicer/originator
• Non-adherence to the key transaction terms envisaged at the time of the rating

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.

Quality of the asset pool and strength of cashflows

The salient features of the pool as on the cut-off date (January 31, 2026) based on the loan-level information submitted to Crisil Ratings are as follows:

• The contracts in the pool pertain to vehicle loans originated by CIFCL.
• The contracts accounting to 93.2% of the pool principal have been current as on the cutoff date (January 31, 2026).
• The contracts accounting to 6.8% of the pool principal are in the overdue bucket of 1-30 days as on the cut off date (January 31, 2026)
• The minimum seasoning of contracts is 4 months.

 

Furthermore, the originator has also represented the following:

• None of the loans in the pool has been restructured or rescheduled.
• The loans are not hypothecated to any lender and do not have any encumbrances on the date of securitisation.

 

Assuming no prepayments, cashflow schedule results in subordination in the form of EIS amounting aggregating to to Rs 61.88 crore (12.8%of pool principal securitised). The portfolio performance of CIFCL 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 external – in the form of cash collateral) provide loss absorption against stressed shortfalls in the pool, commensurate with the rating assigned to the PTCs.

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 portfolio, Crisil Ratings has analysed the asset class wise static pool performance (with information on 90+ delinquencies) of new and used vehicle loans originated by Chola during the period FY 2014 to Q1FY26 (with performance data till Sep 2025). Crisil Ratings has also analysed the dynamic portfolio delinquencies of CIFCL’s portfolio across various portfolio segments. As of September 2025, the 90+ delinquency (as % of managed assets) for CIFCL’s vehicle finance portfolio was 4.1%. Base case shortfalls on the portfolio are adjusted based on 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 similar pools.

 

Assumptions:

•                  After making the adjustments on the above factors, the base case shortfalls in the pool by maturity of the transaction is in the range of 3.5% to 5.5% of pool cashflows.
•                  Monthly prepayment rate of 0.2% to 0.5% has also been applied to the pool cashflows.

About the company- Originator/Servicer profile

Part of the Chennai-based Murugappa group, Chola Finance was incorporated in 1978. The company provides vehicle financing and LAP as well as home loans, MSME and agricultural loans. It has ventured into new businesses in the consumer and MSME ecosystems, namely CSEL, SBPL and SME finance in the second half of fiscal 2022. It had 1,577 branches across 29 states in India, with 85% presence across tier III to tier VI cities, as on December 31,2024.

 

Between April 2005 and March 2010, the company operated as a joint venture between DBS Bank and the Murugappa group. In March 2010, DBS Bank sold its 37.5% equity stake to the Murugappa group. Chola Finance exited the unsecured personal loan segment in October 2008 and subsequently from the asset management business. The Murugappa group holds 51.6% equity stake in Chola Finance, of which 45.5% is held by Cholamandalam Financial Holdings Ltd, a group company.

Chola Finance has two subsidiaries: Cholamandalam Securities Ltd and Cholamandalam Home Finance Ltd, a joint venture with Payswiff Technologies Pvt Ltd and three associates: White Data Systems India Pvt Ltd, Vishvakarma Payments Pvt Ltd and Paytail Commerce Pvt Ltd.

Quality and experience of servicer

CIFCL; rated ‘Crisil A1+’ will continue to service loans assigned to this trust. CIFCL has originated several securitisation transactions previously. 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:

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:

 

• The Trustee acting for and on behalf of the investors shall appoint, the servicer for the purpose of collecting, receiving and managing payment of the Receivables into the Collection and Payment Account for the purpose of managing, collecting and receiving the receivables, holding the underlying security and carry out other roles and roles and responsibilities as specified under the transaction documents
• The servicer shall receive servicing fees which shall be paid by the trustee in accordance with the Waterfall Mechanism as per the transaction documents.
• The servicer shall collect the receivables from the underlying borrowers and deposit the collected amounts in the collection and payment account in a timely manner as per the terms of the transaction documents.
• The servicer shall submit to the trustee all the data and reports in the manner and as per the timelines as specified under the transaction documents.
• The occurrence of certain events as per the terms of the transaction documents shall be construed as a Servicer Event of Default.

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 11 securitisation transactions backed by CIFCL-originated loans. Crisil Ratings is receiving monthly performance reports pertaining to these transactions. The cumulative collection efficiency in the underlying pools for these transactions is 98%-99% as of Dec-2025 payouts, with 90+ delinquency remaining at or below 2.1% of the initial pool principal.

Any other information: Not applicable