Sansar Nov 2025 V Trust

(Originator: Shriram Finance Limited)

‘Crisil AAA (SO)’ for Series A1 PTCs and ‘Crisil AAA (SO)’ for Series A2 PTCs and ‘Crisil BBB+ (SO) Equivalent ‘for Second Loss Facility Converted from Provisional Ratings to Final Ratings

 

Rating Action

Tranche Name	Amount Rated (Rs.Crore)	Outstanding Amount (Rs.Crore)	Balance Tenure	Credit Collateral (Rs.Crore)	Ratings/Credit Opinions	Rating Action
Series A2 PTCs	398.14	398.14	59	132.71	Crisil AAA (SO)	Converted from Provisional Rating to Final Rating
Series A1 PTCs	928.99	888.84	59	132.71	Crisil AAA (SO)	Converted from Provisional Rating to Final Rating
Second loss facility	66.36	66.36	59	66.36	Crisil BBB+ (SO) Equivalent	Converted from Provisional Rating to Final Rating

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 assigned to Series A1 Pass-Through Certificates (PTCs), Series A2 PTCs and the second loss facility issued by ‘Sansar Nov 2025 V Trust’ to final ratings of 'Crisil AAA (SO)' and ‘Crisil AAA (SO)’ and ‘Crisil BBB+ (SO) Equivalent’ respectively under a securitization transaction originated by Shriram Finance Limited (SFL; rated ‘Crisil AA+/Crisil PPMLD AA+/Watch Positive/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.

 

Crisil Ratings has now received the final legal/executed documents for this transaction. Assignment Agreement and Collection and Servicing and Agency Agreement were issued in place of Agreement to Assign and Deed of Assignment(s) and Servicer Agreement respectively. However, this is a nomenclature change in these documents and does not have any impact on the credit profile of the instrument. Cash Collateral Agreement was subsumed into FLCF Agreement and SLCF Agreement, and all the relevant clauses of the Cash Collateral Agreement have been included. These executed documents are in line with terms of the transaction envisaged when provisional rating was assigned. Hence, Crisil Ratings has converted the provisional ratings to final ratings.

 

Legal Documents

• Trust Deed
• Assignment Agreement
• Collection and Servicing and Agency Agreement
• First Loss Credit Facility Agreement
• Second Loss Credit Facility Agreement
• Power of Attorney

 

Other Documents

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

Payment structure

The PTCs are issued under ‘par with excess interest spread (EIS)’ structure with door-to-door tenure of 60 months. Series A1 PTCs and Series Series A2 PTCs holders are entitled to receive timely interest on a monthly basis, while the principal payment is promised on ultimate basis. Monthly yield payment to the holders of Series A1 PTCs and Series A2 PTCs is to be distributed on pro rata basis at their respective yields. Payment of expected principal to PTC Series A1 (including amounts payable owing to unpaid expected series A1 principal/prepayments/foreclosures in the pool); after maturity of PTC Series A1, payment of expected principal to PTC Series A2 (including amounts payable owing to unpaid expected series A2 principal prepayments/foreclosures in the pool.

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 and Series A2 PTCs on a pari-passu basis. 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:

• Internal credit enhancement from subordination of scheduled EIS, amounting to INR 196.03 crore (14.8% of the initial pool principal).
• External credit enhancement from a cash collateral amounting to INR 132.71 crore (10.0% of the initial pool principal) of which first loss facility (FLF) is Rs 66.36 crore (5.0% of pool principal) and second loss facility (SLF) is Rs 66.36 crore (5.0% of pool principal). First loss facility in the form of fixed deposit while the second loss may be provided either in the form of fixed deposit or bank guarantee to be lien marked in favour of the trustee.

 

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, coammensurate with the rating assigned to the PTCs.

Key Rating Drivers & Detailed Description

Strengths:

Credit enhancement available in the transaction structure

• Cash collateral of Rs 132.71 crore (10.0% of initial pool principal)
• Subordination of excess interest spread (EIS). For the initial pool, assuming PTC amortisation from the first month, the scheduled EIS, assuming amortisation from first payout amounts to Rs 196.03 crore (14.8% of the initial pool principal).

Borrower diversification and credit profile

• The initial pool had 24,719 loans and is therefore, fairly diversified; top 10 borrowers contributed to only 0.4% of the initial pool principal. 
• All contracts in the initial pool were current as of pool cut-off date i.e., Nov 20, 2025. Additionally, none of the contracts in the initial pool, have been delinquent in the last six months preceding the pool cut-off date.

 

Weakness:

• Pool composition
• Initial pool comprises ~45% of contracts from farm equipment loan portfolio. On SFL’s portfolio, farm equipment loans have exhibited higher peak delinquency levels than commercial vehicle loan originations. However, for quarterly cohorts of FE loans starting FY21, peak 90+ delinquencies over loan life (including write-offs) have remained below 6.0% of the disbursed principal.
• Effect of potential macro-economic headwinds
• The pool’s collection performance could be hampered in a challenging macroeconomic environment and would remain susceptible to factors like increasing fuel costs, increasing interest rates, and demand moderation owing to inflation and geo-political uncertainties.

 

These aspects have been adequately factored by Crisil Ratings in its rating analysis.

Rating Sensitivity factors

Upward factors

• For Series A1 and Series A2  PTCs: None.
• For Second loss facility: Credit enhancement (based on both internal and external credit enhancements) exceeding 1.4 times the estimated base case shortfalls on the residual cash flows of the pool due to sustained healthy collections from the pool.

 

Downward factors

• For Series A1 and Series A2 PTCs: Credit enhancement (based on both internal and external credit enhancements) falling below 2.5 times the estimated base case shortfalls due to weaker than expected performance of the pool.
• For Second loss facility: Credit enhancement (based on both internal and external credit enhancements) falling below 1.3 times the estimated base case shortfalls. due to weaker than expected performance of the pool.
• Downgrade in the credit rating of the servicer/originator
• Non-adherence to the key transaction terms envisaged at the time of the rating

Liquidity: Strong for Series A1 and Series A2 PTCs and adequate for Second loss facility

For Series A PTCs: The cash collateral available in the transaction structure is Rs 132.71 crore (10.0% of the initial pool principal) of which FLF in the form of fixed deposits while SLF can be either in the form of fixed deposits or bank guarantee. Liquidity is strong given that the credit enhancement (internal and external combined) in the structure is sufficient to cover losses exceeding 1.5 times the currently estimated base shortfalls.

 

For Second loss facility: Liquidity is adequate given that the credit enhancement (internal and external combined) 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 passenger vehicle, commercial vehicle, construction equipment and farm equipment loans (2.0%, 47.2%,5.8% and 44.8%, respectively, of the initial pool principal) originated by SFL. As of the pool cut-off date (20-November-2025), the initial pool loans had a weighted average seasoning of 9.7 months, a weighted average interest rate of 14.9%, a weighted average LTV ratio of 74.6%, a weighted average original tenure of 50.0 months, and an average original loan amount of Rs 6.5 lakh. The top 3 states (MP, UP and MH) contributed 41.7% of the initial pool principal.

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 commercial vehicle, passenger vehicle, farm equipment and construction equipment asset class static pool performance (with information on 90+ delinquencies) of loans originated by Shiram Finance limited during the period FY15 to Q2FY2026 (with performance data till Sep 2025). Crisil Ratings has also analysed the dynamic portfolio delinquencies of Shriram Finance vehicle loan book. As of Sep 2025, the 90+ delinquency for CV, PV, FE CE and 2W was 2.8%, 2.4%, 4.4% 4.0% and 2.9%. respectively. 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 6.0% to 8.0% of pool cashflows.
•                  Monthly prepayment rate of 0.5% to 1.0% has also been applied to the pool cashflows

About the company- Originator/Servicer profile

Following the consummation of the merger of SCUF and demerged undertaking of Shriram Capital Limited with SFL (erstwhile STFCL), the company has been renamed to Shriram Finance Ltd (SFL). Shriram Housing Finance Ltd (SHFL) continues to operate as a subsidiary of SFL which holds around 84.2% stake in the former. Pursuant to the consummation of the transaction, Shriram Capital and SCUF cease to exist.

 

SFL, incorporated in 1979, was registered with RBI as a deposit-taking, asset-financing non-banking financial company and predominantly provides financing for vehicles such as CVs (both pre-owned and new), tractors, and passenger vehicles. Erstwhile SCUF (now merged into SFL) 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).

Key Financial Indicators: SFL consolidated

As on/for year ending	Unit	Mar- 25	Mar-24	Mar-23
Assets under Management (AUM)	Rs. Cr.	263,190^^	2,38,624*	1,93,730*
Total income (net of interest expenses)	Rs. Cr.	23,405	20,195	17,577
Profit after tax	Rs. Cr.	9,436	7198	6,020
Gross NPA (Gross Stage-3)	%	4.6^^	5.2*	6.0*
On-book gearing@	Times	4.1	3.9	3.8
Return on managed assets@	%	3.0&	3.1	3.0

@as per Crisil Ratings calculations

*Gross Stage-3 estimated on combined basis for SFL and SHFL

^^SFL post demerger of SHFL

&adjusted for exceptional gain

 

Key Financial Indicators: SFL (Standalone)

As on/for year ending	Unit	Mar 25	Mar-24	Mar-23
Assets under Management (AUM)	Rs. Cr.	263,190	224,862	185,683
Total income (net of interest exp)	Rs. Cr.	23,405	20,191	17,257
Profit after tax	Rs. Cr.	9,761	7,190	5,979
Gross NPA (Gross Stage-3)	%	4.6	5.5	6.2
On-book gearing@	Times	4.2	3.8	3.6
Return on managed assets@	%	3.2&	3.2	3.4

@as per Crisil Ratings calculations

&adjusted for exceptional gain

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:

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 document.

 

• 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 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 ~96% to ~100% as of November -2025 payouts, with 90+ delinquency remaining at or below 4.0% of the initial pool principal.

Any other information: Not applicable