Sansar March 2026 III Trust (Originator: Shriram Finance Limited) 'Provisional Crisil AA+ (SO)' assigned to Series A1 PTCs, 'Provisional Crisil BBB+ (SO)' assigned to Series A2 PTCs
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 *Actual maturity 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. @A prefix of 'Provisional' indicates that the rating centrally factors in the strength of specific structures and is contingent upon occurrence of certain steps or execution of certain documents by the issuer, as applicable, without which the rating would either have been different or not assigned ab initio. This is in compliance with a May 6, 2015 directive ‘Standardizing the term, rating symbol, and manner of disclosure with regards to conditional/ provisional/ in-principle ratings assigned by credit rating agencies' by Securities and Exchange Board of India (SEBI) and April 27, 2021 circular ‘Standardizing and Strengthening Policies on Provisional Rating by Credit Rating Agencies (CRAs) for Debt Instruments’ by SEBI.
Detailed Rationale Crisil Ratings has assigned its ‘Provisional Crisil AA+ (SO)’ rating to Series A1 Pass Through Certificates (PTCs), ‘Provisional Crisil BBB+ (SO)’ rating to Series A2 Pass Through Certificates (PTCs) to be issued by ‘Sansar March 2026 III Trust’ under a securitisation transaction backed by receivables from vehicle loans originated by Shriram Finance Limited (SFL; rated ‘Crisil AAA/Crisil PPMLD AAA/Stable/Crisil A1+’).
This securitisation transaction is backed by receivables from a pool of commercial vehicle, construction equipment, passenger vehicle and tractor loans originated by SFL. The ratings are based on the expected credit quality of the pool backing the transaction, the origination and servicing capabilities of SFL, credit enhancement available to the PTCs, the transaction’s payment mechanism, and soundness of the transaction’s legal structure. |
Payment structure The transaction has a ‘Par with EIS’ structure. SFL will assign the loan pool to ‘Sansar March 2026 III Trust’, a Trust settled by the transaction’s Trustee, i.e. Catalyst Trusteeship Limited in exchange for a purchase consideration amounting to 100.0% of the initial pool principal as on the cut-off date. The Trust will issue Series A1 PTCs and Series A2 PTCs to investors for amounts equal to 94.38% and 5.62% of the initial pool principal as on the cut-off date, respectively. The Trustee will appoint SFL as the Servicer, and collections from the pool will be transferred to the Collection and Payout Account (CPA) on a monthly basis to make investor payouts as per the transaction’s waterfall mechanism.
Series A1 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 Series A1 PTC’s final maturity date. Post redemption of Series A1 PTCs, principal repayment to Series A2 PTC investors is expected on a monthly basis, but promised only on an ultimate basis by the Series A2 PTC’s legal final maturity date. Series A2 investors are expected to receive residual EIS amounts on a monthly basis, however, the rating on Series A2 PTCs only addresses the likelihood of principal repayment by the legal final maturity date, and not the payment of residual EIS amounts.
The investor payouts for Series A1 PTCs are supported by cash collateral, subordination of Series A2 PTC principal, and subordination of excess interest spread (EIS). On a monthly basis, the cash collateral can be used to make the promised interest payments to Series A1 PTCs in case of a shortfall in collections from the pool. On the Series A1 PTC’s 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. Post the redemption of Series A1 PTCs, On the Series A2 PTC’s 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. Prior to the redemption of Series A1 PTCs, prepayment collections will be utilised for accelerated redemption of the Series A1 PTCs, and post the redemption of Series A1 PTCs, prepayment collections will be utilised for accelerated redemption of the Series A2 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. On final maturity, the cash collateral will be used to redeem outstanding principal balances, if any, of Series A1 and Series A2 PTCs on a pari passu basis.
Credit enhancement available in the transaction structure is as below:
to Rs 71.19 crore (4.38% of the initial pool principal) which is expected to be maintained as fixed deposits with a bank
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. |
Key Rating Drivers & Detailed Description Strengths:
Weaknesses:
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Rating Sensitivity factors Upward factors
Downward factors
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Liquidity: Strong for Series A1 PTCs, Adequate for Series A2 PTCs For Series A1 PTCs: 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. The cash collateral available in the structure (Rs 71.19 crore, 4.4% of the initial pool principal) would cover the first 10.0 months of promised interest payments even in case of no collections from the underlying pool.
For Series A2 PTCs: Liquidity is adequate given that the credit enhancement available in the structure is sufficient to cover losses exceeding 1.1 times the currently estimated base shortfalls. |
Quality of the asset pool and strength of cashflows The securitisation transaction is backed by a pool of receivables from, commercial vehicle, farm equipment, construction equipment and passenger vehicle loans originated by SFL. As of the pool cut-off date (20-March-2026), the initial pool loans had a weighted average seasoning of 12.9 months, a weighted average interest rate of 15.0%, a weighted average LTV ratio of 72.5%, a weighted average original tenure of 49.3 months, and an average original loan amount of Rs 5.4 lakh. The top 3 states (Madhya Pradesh, Karnataka and Maharashtra) contributed 36.7% of the initial pool principal. |
Rating assumptions Background:
Assumptions:
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Additional disclosures for Provisional ratings The provisional rating is contingent upon execution and receipt of the following documents:
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 Shriram Finance, incorporated in 1979, is registered with Reserve Bank of India (RBI) as a deposit-taking, asset-financing NBFC and predominantly provides financing for vehicles such as CVs (both pre-owned and new), tractors and passenger vehicles. Erstwhile Shriram City Union Finance (SCUF; now merged into Shriram Finance) was incorporated in 1986 and operated in the retail financing segment with a focus on small enterprise loans, two-wheeler financing, gold loans, housing loans and others (auto and personal loans).
The company reported net profit of Rs 7,003 crore on total income of Rs 35,660 crore in the first nine months of fiscal 2026 as against net profit of Rs 9,436 crore on total income of Rs 41,859 crore in fiscal 2025. |
Key Financial Indicators SFL consolidated
RoMA for Dec-25 is annualised @As per Crisil Ratings calculations Gross stage-3 estimated on combined basis for Shriram Finance ^^Shriram Finance post demerger of Shriram Housing Finance Ltd (renamed as Truhome Finance Ltd) |
Quality and experience of servicer SFL will continue to service loans assigned to this trust. SFL 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 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.
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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 ratings outstanding on instruments issued under 20+ securitisation transactions backed by SFL-originated loans. Crisil Ratings is receiving monthly performance reports pertaining to these transactions. The cumulative collection efficiency in the underlying pools for these transactions range from ~95% to ~100% as of December -2025 payouts, with 90+ delinquency remaining at or below 3.5% of the initial pool principal. |
Any other information: Not applicable |
Note on complexity levels of the rated instrument: |
Annexure - Details of Instrument(s)
^ISIN details for instruments were not received as of date |
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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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