Sansar Trust Nov 2023 II

(Originator: Shriram Finance Limited)

Ratings Reaffirmed

 

Rating Action

Trust Name		Details	Amount Rated (Rs.Crore)	Outstanding Rated Amount$ (Rs.Crore)	Original Tenure# (Months)	Residual Tenure# (Months)	Credit Collateral^ (Rs.Crore)	Ratings/Credit Opinions	Rating Action
Sansar Trust Nov 2023 II		Series A1 PTCs	92.69	27.40	52	26	4.88	Crisil AAA (SO)	Crisil AAA(SO) [Rating Reaffirmed])
		Series A2 PTCs	4.88	4.88				Crisil BBB+ (SO)	Crisil BBB+(SO) [Rating Reaffirmed]

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

$After January 2026 payout

#Indicates door to door tenure; actual tenure will depend on the level of prepayments in the pool, exercise of the clean-up call option and extension due to moratorium

^Additionally scheduled internal subordination after January 2026 payout approximating to Rs.1.93 crore (assuming zero prepayments and post servicer fee payment) also provides credit support to PTCs.

 

Detailed Rationale

Crisil Ratings has reaffirmed its rating for Series A1 pass-through certificates (PTCs) at ‘Crisil AAA (SO)’ and reaffirmed its ‘Crisil BBB+ (SO)’ rating for Series A2 PTCs issued by ‘Sansar Trust Nov 2023 II’. The transaction is 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 replenishing pool of two-wheeler 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 has assigned the loan pool to ‘Sansar May 2024 Trust’, a Trust settled by the transaction’s Trustee, i.e. Catalyst Trusteeship Limited (‘CTL’) in exchange for a purchase consideration amounting to 100.0% of the initial pool principal as on the cut-off date. The Trust has issued Series A1 PTCs and Series A2 PTCs to investors for amounts equal to 95.0% and 5.0% of the initial pool principal as on the cut-off date, respectively. The Trustee has appointed 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.

Adequacy of credit enhancement

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.
 

Credit enhancement available in the transaction structure to support promised PTC payouts is as below:

• External credit enhancement for Series A1 and Series A2 PTCs from a cash collateral amounting to Rs 4.88 crore (14.5% of future investor payouts)
• Internal credit enhancement from subordination of scheduled EIS amounting to Rs 1.93 crore (5.7% of future investor payouts).

 

Based on Crisil Ratings assessment, the total credit enhancement available in the transaction (internal – in the form of EIS and junior tranche; and external – in the form of cash collateral) provide loss absorption against stressed shortfalls in the pool, commensurate with the ratings

The pool has exhibited good collection performance as of January-26 as seen by strong collections ratios. The cumulative collection ratio (CCR)[1] for the pool is robust at 99.1%. This has led to minimal delinquencies in the pool as reflected in 0+ overdue of 0.4%. The healthy collection performance coupled with high amortisation of around 66.9% has led to an increase in the credit cover available to future PTC payouts from the cash collateral.

 

The pool is eligible for further reset of credit enhancement. Crisil Ratings has evaluated the reset in line with regulatory guidelines. However, investor consent is yet to be received. On receiving consent of the investor and trustee, a maximum amount of Rs2.05 crore (42.0% of the current total cash collateral) can be released from the current credit enhancement of Rs. 4.88 crore.

 

Sr.no	Collateral details	Current outstanding CC (Rs.in Cr)	CC eligible for release (Rs.in Cr)	Residual CC assuming full reset (Rs.in Cr)
1	Series A1 PTCs	4.88	2.05	2.83
2	Series A2 PTCs

 

[1]CCR = {Total collections in the pool/(Total billings + opening overdues at the time of securitisation)}

Key Rating Drivers & Detailed Description

Strengths:

• Credit support available in the structure
  • As after January 2026 payout, credit collateral covering 14.5% of future investor payouts, provides support to Series A1 and Series A2 PTCs. The PTCs also benefit from scheduled principal subordination and EIS, approximating Rs 1.93 crore (5.7% of future investor payouts).
• Healthy Collection Metrics
  • As of January 2026 payout, the CCR of the transaction is 99.1 %. The 3-month average monthly collection ratio (MCR)[2] is 99.5%.

 

Weakness:

• Potential effect of macro-economic headwinds

• Borrowers in the underlying pool could come under pressure due to a challenging macroeconomic environment. Headwinds such as increased fuel costs and moderation in demand on account of inflation and geo-political uncertainties. These factors may hamper pool collection ratios. 

[2]MCR = Monthly collections in the pool / Monthly billings

Rating Sensitivity factors

Upward factors:

         For Series A1 PTC: None

         For Series A2 PTC: Credit enhancement (both internal and external combined) available in the structure exceeding 1.4 times the estimated base shortfalls on the residual pool cash flows of the pool.

 

Downward factors:

         For Series A1 PTCs: Credit enhancement (based on both internal and external combined) falling below 2.5 times the estimated base shortfalls on the residual pool cash flows.

         For Series A2 PTCs: Credit enhancement (based on both internal and external combined) falling below 1.2 times the estimated base shortfalls on the residual pool cash flows

         A sharp down grade in the ratings of the servicer/originator

         Non-adherence to the key transaction terms envisaged at the time of the rating.

Liquidity: Strong for Series A1 PTCs, Adequate for Series A2 PTCs

         For Series A1 PTC: 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 4.88 crore, 5.0% of the initial pool principal) would cover the first six months of promised interest payments even in case of no collections from the underlying pool.

 

         For Series A2 PTC: 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

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 4.0% to 7.0% of pool cashflows.
• Monthly prepayment rate of 0.5% to 1.5% has also been applied to the pool cashflows.

About the company- Originator/Servicer profile

Shriram Finance, 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 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 4,474 crore on total income of Rs 23,464 crore in the first half 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: Shriram Finance (Consolidated)

As on/for year ending	Unit	Sep-25	Mar- 25	Mar-24	Mar-23
Assets under management (AUM)	Rs crore	281,309	263,190^^	2,38,624	1,93,730
Total income (net of interest expenses)	Rs crore	12,538	23,405	20,195	17,577
Profit after tax	Rs crore	4,474	9,436	7198	6,020
Gross NPA (Gross Stage-3)	%	4.6	4.6^^	5.2*	6.0*
On-book gearing@	Times	3.9	4.1	3.9	3.8
Return on managed assets@	%	3.0*	3.0&	3.1	3.0

*Annualised

@As per Crisil Ratings calculations

*Gross Stage-3 estimated on combined basis for Shriram Finance

^^Shriram Finance post demerger of SHFL

&adjusted for exceptional gain

Quality and experience of servicer

SFL (rated ‘Crisil AA+/Crisil PPMLD AA+/Watch Positive/Crisil A1+’) will continue to service loans assigned to this trust. SFL has originated several securitisation transactions over the last three decades. 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 junior tranche; 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 22 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 December-2025 payouts, with 90+ delinquency remaining at or below 2.5% of the initial pool principal.

Any other information: Not Applicable