Rating Rationale
October 09, 2017 | Mumbai
Sansar Trust September 2017
(Originator: Shriram Transport Finance Company Limited)
  CRISIL assigns 'Provisional CRISIL AAA (SO)' to Series A PTCs and 'Provisional CRISIL BBB+ (SO) Equivalent' to Second loss facility
Rating Action
Trust Name Details Amount Rated (Rs Cr) Pool Principal (Rs Cr)  Original Tenure (Months) Credit Collateral (Rs Cr) Ratings/ Credit Opinions@ Rating Action
Sansar Trust September 2017 Series A PTCs 300.43 300.43 54# 31.83 Provisional CRISIL AAA (SO) Provisional Rating Assigned
Second loss facility 16.81 15.02 Provisional CRISIL BBB+ (SO) Equivalent
1 crore = 10 million
Refer to annexure for Details of Instruments & Bank Facilities

# Door to door tenure from pool cut-off date is 56 months. Tenure compu ted from first payout date is 54 months. Actual tenure will depend on 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 will be supported by certain critical documentation by the issuer, without which the rating would either have been different or not assigned ab initio. This is in compliance with a May 6, 2015, Securities and Exchange Board of India (SEBI) directive, 'Standardising the term, rating symbol, and manner of disclosure with regard to conditional/ provisional/ in principle ratings assigned by CRAs 1
Detailed Rationale

CRISIL has assigned its 'Provisional CRISIL AAA (SO)' to Series A pass-through certificates (PTCs) issued by 'Sansar Trust September 2017'. The second loss facility under the transaction has been assigned credit opinion equivalent of 'Provisional CRISIL BBB+ (SO)'. The transaction is backed by receivables from new and used commercial vehicles, passenger vehicles, three wheeler vehicles and construction equipment loans  originated by Shriram Transport Finance Company Limited (STFCL; rated 'CRISIL AA+/FAAA/Stable/CRISIL A1+'). The ratings are based on the credit support available to the PTCs, credit quality of underlying pool receivables, STFCL's origination and servicing capabilities, and soundness of the transaction's legal structure.
The transaction has a 'Par with Excess Interest Spread' structure. STFCL will assign the pool to 'Sansar Trust September 2017', settled by Catalyst Trusteeship Services Limited (CTL) which will issue the PTCs to investors. The PTCs are supported by the credit collateral - in the form of fixed deposit and excess interest spread. The total credit support available in the transaction is as below:

  • Internal credit support in the form of scheduled Excess Interest Spread (EIS), aggregating Rs 36.04 crore (12.0% of pool principal or 9.6% of pool cashflows)
  • External credit enhancement of Rs. 31.83 crore (10.6% of pool principal or 8.4% of pool cashflows) of which second loss facility of Rs. 16.81 crore (5.6% of pool principal) is in the form of Fixed Deposit and first loss facility of Rs. 15.02 crore (5.0% of pool principal) is also in the form of fixed deposit

Series A PTCs are entitled to receive timely interest and timely principal on a monthly basis
This is a 'provisional' rating and will be converted into a 'final' rating on receipt of the following documents:

  • Trust deed
  • Deed of assignment
  • Power of attorney
  • Information memorandum
  • Legal opinion
  • Trustee letter
  • Auditor's certificate
  • Representations and warranties letter
  • First loss credit facility agreement
  • Second loss credit facility agreement
  • Collection and Servicing Agency Agreement 

Additional documents, if any, executed for the transaction should also be provided. A rating rationale/report indicating the conversion of the 'provisional' rating to 'final' post the receipt of all the required final legal documents will be published on the CRISIL website. Please click on the link below for detailed information on CRISIL's policy on provisional rating: Revision in CRISIL policy for assigning 'provisional' rating.

Key Rating Drivers & Detailed Description
Supporting Factors
  • Credit support available in the structure
    • Credit collateral of Rs 31.83 crore (10.6% of the pool principal) provides credit support to Series A PTCs. The PTCs also benefit from scheduled EIS aggregating Rs 36.04 crore (12.0% of pool principal).
  • Presence of contracts with low IRR in the pool
    • The contracts in the pool have a weighted average interest rate of 13.73%. At portfolio level, low IRR contracts have performed better than the contracts with higher IRR
Constraining Factors
  • Moderate presence of 1 month overdue contracts
o At the time of securitization (as on September 20, 2017), proportion of 1 month overdue contracts in the pool was 8.5% of principal

  • Low seasoning
    • Low seasoning as evidenced by weighted average seasoning of 8.1 months and pool amortisation of 14.01%
About the Pool
The pool securitised comprises receivables from new and used commercial vehicles, passenger vehicles, three wheeler vehicles and construction equipment loans. The pool has low seasoning profile as evidenced by its weighted average net seasoning of 8.1 months. The pool is geographically diversified with top 3 states in the pool accounting for 33.4% of pool principal. Average ticket size is Rs.6.6 lakhs with moderate loan to value ratio of 69.5%.The pool has low interest rate contracts with weighted average interest rate of 13.7%. Pool had moderate proportion of one-month overdue contracts as on pool cut-off date (September 20, 2017). CRISIL has adequately factored all these aspects in its rating analysis.

Rating Assumptions
To assess the base case shortfalls for the transaction, CRISIL has analysed static pool information on new and used vehicles provided by STFCL for originations in the period FY2009 to FY2017-Q2 (with performance data till June 2017). CRISIL has also analysed performance of rated securitisation transactions, and the performance of STFCL's portfolio.
CRISIL has also factored in pool specific characteristics and estimated the base case peak shortfalls in the pool in the range of 5 to 7 per cent of pool cash flows.

  • CRISIL has assumed a stressed monthly prepayment rate of 0.5 to 1.0 per cent in its analysis.
  • CRISIL does not envisage any risk arising on account of commingling of cash flows since CRISIL's short term rating on the servicer is 'CRISIL A1+'
  • CRISIL has adequately factored in the risks arising on account of counterparties (refer to counterparty details below)
  • CRISIL has run sensitivities based on various shortfall curves (front-ended, back-ended and normal) and has adequately factored the same in its analysis.

Counterparty details


Counterparty Name

Counterparty Rating/ Track record

Effect on credit ratings in case of non-performance

Originator and seller



No effect.




Significant effect, because of change in servicing quality and replacement cost of servicer (not factored in by CRISIL given CRISIL's rating on the servicer). However, CRISIL does not envisage the requirement for replacement.

Collection and Payout Account Bank

The Bank of
UFJ, Ltd.

Not rated by CRISIL

Negligible effect. Account bank can be changed without impacting the rating.

Second loss facility in the form of fixed deposit


Rated 'CRISIL AAA/Stable'

Negligible effect. Bank with whom the fixed deposit is maintained can be changed without impacting the rating.

First loss facility in the form of Fixed Deposit


Rated 'CRISIL AAA/Stable'

Negligible effect. Bank with whom the fixed deposit is maintained can be changed without impacting the rating.



Adequate Track Record

Negligible effect. Can be replaced at minimal cost.

About the Originator
STFCL, incorporated in 1979, is the flagship company of the Shriram group. It is registered with RBI as a deposit-taking, asset-financing non-banking financial company. STFCL provides financing for vehicles such as CVs (both pre-owned and new), tractors, and passenger vehicles. It has pan-India presence, with 918 branches and 854 rural centers as on March 31, 2017. STFCL is also engaged in the construction equipment (CEQ) financing business through its erstwhile wholly owned subsidiary,
* Shriram Equipment Finance Company that was merged with STFCL with effect from 1st April 2015.
* Consolidated financials include the results of Shriram Equipment Finance Company Ltd that was merged with STFCL w.e.f 1st April 2015

Past rated Pools
CRISIL has ratings outstanding on 18 transactions originated by STFCL. CRISIL is receiving monthly performance reports pertaining to the CRISIL-rated STFCL originated securitisation transactions.
Key Financial Indicators
As on / for the quarter ended June 30   2017 2016
Total Assets Rs crore 77,879.4 70,314.4
Total income (net of interest expenses) Rs crore 1588.0 1348.6
Profit after tax Rs crore 448.7 374.1
Capitalization % 16.26 17.37
Gross NPA % 8.03^ 6.38*
Return on assets (annualized) % 2.4 2.2
Adjusted Gearing Times 6.0 5.9
*As per 150 dpd
^As per 120 dpd

Any other information: Not applicable

Note on complexity levels of the rated instrument:
CRISIL complexity levels are assigned to various types of financial instruments. The CRISIL complexity levels are available on www.crisil.com/complexity-levels. Users are advised to refer to the CRISIL complexity levels for instruments that they consider for investment. Users may also call the Customer Service Helpdesk with queries on specific instruments.
Annexure - Details of Instrument(s)
Type of Instrument Rated Amount
(Rs Cr)
Date of Allotment Maturity Date# Coupon Rate (%) (p.a.p.m) Outstanding
Ratings/credit opinions
Credit collateral (Rs Cr)^
Series A PTCs 300.43 26-Sep-17 17-Apr-22 6.922% Provisional CRISIL AAA (SO)$ 31.83*
Second loss facility 16.81 - Provisional CRISIL BBB+ (SO) Equivalent 15.02
#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
^Scheduled excess interest spread (EIS) amounting to Rs. 36.04 Cr (assuming zero prepayments) also provides credit support to PTCs
*Includes a second loss facility of Rs.16.81 Cr
$Series A PTC holders are entitled to receive timely interest and timely principal.
Annexure - Rating History for last 3 Years
  Current 2017 (History) 2016  2015  2014  Start of 2014
Instrument Type Quantum Rating Date Rating Date Rating Date Rating Date Rating Rating
Series A PTCs LT 300.43 Provisional CRISIL AAA (SO)   --   --   --   -- --
Second loss facility LT  16.81 Provisional CRISIL BBB+ (SO) Equivalent   --   --   --   -- --
Table reflects instances where rating is changed or freshly assigned. 'No Rating Change' implies that there was no rating change under the release.
Links to related criteria
CRISILs rating methodology for ABS transactions
Evaluating risks in securitisation transactions - A primer
Legal analysis in structured finance transactions

For further information contact:
Media Relations
Analytical Contacts
Customer Service Helpdesk
Saman Khan
Media Relations
CRISIL Limited
D: +91 22 3342 3895
B: +91 22 3342 3000

Naireen Ahmed
Media Relations
CRISIL Limited
D: +91 22 3342 1818
B: +91 22 3342 3000

Jyoti Parmar
Media Relations
CRISIL Limited
D: +91 22 3342 1835
B: +91 22 3342 3000

Krishnan Sitaraman
Senior Director - CRISIL Ratings
CRISIL Limited
D:+91 22 3342 8070

Ajit Velonie
Director - CRISIL Ratings
CRISIL Limited
D:+91 22 4097 8209

Thara Varghese
Rating Analyst - CRISIL Ratings
CRISIL Limited
B:+91 22 3342 3000
Timings: 10.00 am to 7.00 pm
Toll free Number:1800 267 1301

For a copy of Rationales / Rating Reports:
For Analytical queries:


Note for Media:
This rating rationale is transmitted to you for the sole purpose of dissemination through your newspaper / magazine / agency. The rating rationale may be used by you in full or in part without changing the meaning or context thereof but with due credit to CRISIL. However, CRISIL alone has the sole right of distribution (whether directly or indirectly) of its rationales for consideration or otherwise through any media including websites, portals etc.

About CRISIL Limited

CRISIL is an agile and innovative, global analytics company driven by its mission of making markets function better. We are India’s foremost provider of ratings, data, research, analytics and solutions. A strong track record of growth, culture of innovation and global footprint sets us apart. We have delivered independent opinions, actionable insights, and efficient solutions to over 100,000 customers.

We are majority owned by S&P Global Inc., a leading provider of transparent and independent ratings, benchmarks, analytics and data to the capital and commodity markets worldwide.

For more information, visit www.crisil.com 


About CRISIL Ratings
CRISIL Ratings is part of CRISIL Limited (“CRISIL”). We pioneered the concept of credit rating in India in 1987. CRISIL is registered in India as a credit rating agency with the Securities and Exchange Board of India (“SEBI”). With a tradition of independence, analytical rigour and innovation, CRISIL sets the standards in the credit rating business. We rate the entire range of debt instruments, such as, bank loans, certificates of deposit, commercial paper, non-convertible / convertible / partially convertible bonds and debentures, perpetual bonds, bank hybrid capital instruments, asset-backed and mortgage-backed securities, partial guarantees and other structured debt instruments. We have rated over 24,500 large and mid-scale corporates and financial institutions. CRISIL has also instituted several innovations in India in the rating business, including rating municipal bonds, partially guaranteed instruments and microfinance institutions. We also pioneered a globally unique rating service for Micro, Small and Medium Enterprises (MSMEs) and significantly extended the accessibility to rating services to a wider market. Over 1,10,000 MSMEs have been rated by us.


CRISIL respects your privacy. We use your contact information, such as your name, address, and email id, to fulfil your request and service your account and to provide you with additional information from CRISIL and other parts of S&P Global Inc. and its subsidiaries (collectively, the “Company) you may find of interest.

For further information, or to let us know your preferences with respect to receiving marketing materials, please visit www.crisil.com/privacy. You can view the Company’s Customer Privacy at https://www.spglobal.com/privacy

Last updated: April 2016


This disclaimer forms part of and applies to each credit rating report and/or credit rating rationale that we provide (each a “Report”). For the avoidance of doubt, the term “Report” includes the information, ratings and other content forming part of the Report. The Report is intended for the jurisdiction of India only. This Report does not constitute an offer of services. Without limiting the generality of the foregoing, nothing in the Report is to be construed as CRISIL providing or intending to provide any services in jurisdictions where CRISIL does not have the necessary licenses and/or registration to carry out its business activities referred to above. Access or use of this Report does not create a client relationship between CRISIL and the user.

We are not aware that any user intends to rely on the Report or of the manner in which a user intends to use the Report. In preparing our Report we have not taken into consideration the objectives or particular needs of any particular user. It is made abundantly clear that the Report is not intended to and does not constitute an investment advice. The Report is not an offer to sell or an offer to purchase or subscribe for any investment in any securities, instruments, facilities or solicitation of any kind or otherwise enter into any deal or transaction with the entity to which the Report pertains. The Report should not be the sole or primary basis for any investment decision within the meaning of any law or regulation (including the laws and regulations applicable in the US).

Ratings from CRISIL Rating are statements of opinion as of the date they are expressed and not statements of fact or recommendations to purchase, hold, or sell any securities / instruments or to make any investment decisions. Any opinions expressed here are in good faith, are subject to change without notice, and are only current as of the stated date of their issue. CRISIL assumes no obligation to update its opinions following publication in any form or format although CRISIL may disseminate its opinions and analysis. CRISIL rating contained in the Report is not a substitute for the skill, judgment and experience of the user, its management, employees, advisors and/or clients when making investment or other business decisions. The recipients of the Report should rely on their own judgment and take their own professional advice before acting on the Report in any way.

Neither CRISIL nor its affiliates, third party providers, as well as their directors, officers, shareholders, employees or agents (collectively, “CRISIL Parties”) guarantee the accuracy, completeness or adequacy of the Report, and no CRISIL Party shall have any liability for any errors, omissions, or interruptions therein, regardless of the cause, or for the results obtained from the use of any part of the Report. EACH CRISIL PARTY DISCLAIMS ANY AND ALL EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY, SUITABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE. In no event shall any CRISIL Party be liable to any party for any direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees, or losses (including, without limitation, lost income or lost profits and opportunity costs) in connection with any use of any part of the Report even if advised of the possibility of such damages.

CRISIL Ratings may receive compensation for its ratings and certain credit-related analyses, normally from issuers or underwriters of the instruments, facilities, securities or from obligors. CRISIL’s public ratings and analysis as are required to be disclosed under the regulations of the Securities and Exchange Board of India (and other applicable regulations, if any) are made available on its web sites, www.crisil.com (free of charge). Reports with more detail and additional information may be available for subscription at a fee – more details about CRISIL ratings are available here: www.crisilratings.com.

CRISIL and its affiliates do not act as a fiduciary. While CRISIL has obtained information from sources it believes to be reliable, CRISIL does not perform an audit and undertakes no duty of due diligence or independent verification of any information it receives and / or relies in its Reports. CRISIL keeps certain activities of its business units separate from each other in order to preserve the independence and objectivity of the respective activity. As a result, certain business units of CRISIL may have information that is not available to other CRISIL business units. CRISIL has established policies and procedures to maintain the confidentiality of certain non-public information received in connection with each analytical process. CRISIL has in place a ratings code of conduct and policies for analytical firewalls and for managing conflict of interest. For details please refer to: http://www.crisil.com/ratings/highlightedpolicy.html

CRISIL’s rating criteria are generally available without charge to the public on the CRISIL public web site, www.crisil.com. For latest rating information on any instrument of any company rated by CRISIL you may contact CRISIL RATING DESK at CRISILratingdesk@crisil.com, or at (0091) 1800 267 1301.

This Report should not be reproduced or redistributed to any other person or in any form without a prior written consent of CRISIL.

All rights reserved @ CRISIL