Rating Rationale
June 06, 2018 | Mumbai
Sansar Trust May 2018
(Originator: Shriram Transport Finance Company Limited)
'Provisional CRISIL AAA (SO)' assigned to Series A PTCs and 'Provisional CRISIL BBB+ (SO) Equivalent' assigned to Second loss facility  
Rating Action
Trust Name Instrument
Amount Rated (Rs Cr) Pool Principal
(Rs Cr)
Original Tenure (Months) Credit Collateral (Rs Cr) Ratings/ Credit Opinions@ Rating Action
Sansar Trust May 2018 Series A PTCs 68.21 68.21
7.19 Provisional CRISIL AAA (SO) Provisional Rating Assigned
Second loss facility 3.78 3.41 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 as computed from the first payout date is 54 months. Actual tenure will depend on the level of prepayments in the pool, and possible 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)' ratings to Series A Pass-Through Certificates (PTCs) issued by 'Sansar Trust May 2018' under a securitisation transaction originated by Shriram Transport Finance Company Limited (STFCL; rated 'CRISIL AA+/FAAA/Stable/CRISIL A1+'). The Second Loss Facility under this transaction has been assigned a credit opinion of 'Provisional CRISIL BBB+ (SO) Equivalent'.

This securitisation transaction is backed by receivables from new and used commercial vehicles, passenger vehicles, three-wheeler, and construction equipment loans originated by STFCL. The rating / credit opinion is based on the credit support available to the PTCs, credit quality of underlying 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 May 2018', settled by IDBI Trusteeship Services Limited (ITSL) which will issue the PTCs to investors. The Series A PTC payouts are supported by credit collateral in the form of Fixed Deposits and Excess Interest Spread (EIS).

The total credit support available in the transaction is as below:
* Internal credit support in the form of scheduled EIS assuming zero prepayments aggregating Rs 10.61 crore (15.6% of pool principal or 11.9% of pool cash flows)
* External credit enhancement of Rs 7.19 crore (10.5% of pool principal or 8.0% of pool cash flows) of which second loss facility of Rs 3.78 crore (5.5% of pool principal) is in the form of a Fixed Deposit and first loss facility of Rs 3.41 crore (5.0% of pool principal) is also in the form of a Fixed Deposit

Series A PTC holders 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

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' rating post receipt of all the required final legal documentation 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 7.19 crore (10.5% of pool principal) provides credit support to Series A PTCs. The PTCs also benefit from scheduled EIS (assuming zero prepayment) aggregating Rs 10.61 crore (15.6% of pool principal).
  • Presence of contracts with low IRR in the pool
  • The contracts in the pool have a weighted average interest rate of 14.2%. At the portfolio level, low IRR contracts have performed better than contracts with higher IRR.
Constraining Factors
  • Moderate presence of overdue contracts
    • As of the pool cut-off date (April 30, 2018), 6.6% of the pool principal was comprised of contracts where interest and principal payments were overdue up to one month.
  • Moderate seasoning
    • Weighted average seasoning of contracts in the pool was 6.9 months and the pool principal was amortised by 10.2% at the time of securitisation.
About the Pool
The securitised pool comprises of underlying receivables from new and used commercial vehicles, passenger vehicles, three-wheeler, and construction equipment loans. The pool has a moderate seasoning profile as evidenced by its weighted average net seasoning of 6.9 months. Contracts in the pool are geographically diversified with top 3 states accounting for 33.2% of pool principal. The average ticket size for contracts in the pool is Rs 7.1 lakh, with a moderate weighted average loan-to-value ratio of 72.0%. The weighted average interest rate of contracts in the pool is a low 14.2%. The pool had a moderate proportion of contracts overdue up to one month as on the pool cut-off date (April 30, 2018). 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 performance for new and used vehicles provided by STFCL for originations from FY2009 to Q2FY2018 (performance data up to March 2018). CRISIL has also analysed performance of previously rated securitisation transactions, and the performance of STFCL's loan portfolio. As of Mar 2018, 90+ dpd for the used and new portfolio are 5.9% and 5.8%, respectively.
CRISIL has also factored in pool-specific characteristics and estimated base-case peak shortfalls in the pool to be in the range of 5 to 7 per cent of pool cash flows. 

  • CRISIL has assumed a stressed monthly prepayment rate of 0.3 to 0.8 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 STFCL Rated 'CRISIL AA+/FAAA/Stable/CRISIL A1+'  
No effect.
Servicer STFCL Rated 'CRISIL AA+/FAAA/Stable/CRISIL A1+' 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 Woori Bank Not Rated Negligible effect. Account bank can be changed without impacting the rating.
Second loss facility in the form of fixed deposit ICICI Bank 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 ICICI Bank Rated 'CRISIL AAA/Stable' Negligible effect. Bank with whom the fixed deposit is maintained can be changed without impacting the rating.
Trustee ITSL 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 over a 1,000 branches and 930 rural centers as on December 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. In January 2018, STFCL announced that it would sell majority stake in wholly owned subsidiary Shriram Automall to MXC Solutions India Pvt Ltd (MXC, owner of CarTrade.com) for Rs 156.38 crore. The transaction is expected to be completed by April 2018.

STFCL's reported total income (net of interest expense) and profit after tax (PAT) was Rs 5,597 crore and Rs 1,257 crore respectively, for fiscal 2017, against Rs 5,197 crore  and Rs 1,178 crore, respectively, for fiscal 2016. For the nine months ending December 31, 2017, the company reported total income (net of interest expenses) and profit after tax (PAT) of Rs 5,003 crore and Rs 1,423 crore respectively as against Rs 4,164 crore and Rs 1,108 crore for the corresponding period in the previous year.

Past Rated Pools
CRISIL has ratings outstanding on 18 securitisation transactions originated by STFCL. CRISIL is receiving monthly performance reports pertaining to these transactions.

*Consolidated financials include the results of Shriram Equipment Finance Company Ltd that was merged with STFCL w.e.f 1st April 2015.
Key Financial Indicators
Particulars Unit  2017 2016
Total Assets Rs Cr 83,034.4 71,533.6
Total income (net of interest expenses) Rs Cr 5,003 4,164
PAT Rs Cr 1,423 1,108
Gross NPA % 7.98@ 6.62#
Overall Capital Adequacy Ratio % 16.15 17.55
Return on Managed Assets % 2.0 1.8
@As per 120+ dpd
#As per 150+ 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 (%) (annualised) Outstanding
Ratings/credit opinions
Credit collateral (Rs Cr)^
Series A PTCs 68.21 30-May-18 20-Nov-22 7.25% Provisional CRISIL AAA (SO)$ 7.19*
Second loss facility 3.78 - Provisional CRISIL BBB+ (SO) Equivalent 3.41
#Indicates door to door tenure. Actual tenure will depend on the level of prepayments in the pool, and possible exercise of the clean-up call option
^In addition, scheduled Excess Interest Spread (EIS) amounting to Rs 10.61 Cr (assuming zero prepayments) also provides credit support to PTCs
*Includes a second loss facility of Rs 3.78 Cr
$Series A PTC holders are entitled to receive timely interest and timely principal
Annexure - Rating History for last 3 Years
  Current 2018 (History) 2017  2016  2015  Start of 2015
Instrument Type Outstanding Amount Rating Date Rating Date Rating Date Rating Date Rating Rating
Series A PTCs  LT   68.21  Provisional CRISIL AAA (SO)   --    --    --    --  -- 
Second loss facility  LT  3.78  Provisional CRISIL BBB+ (SO) Equivalent   --     --     --     --  --  
All amounts are in Rs.Cr.
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:+9122 3342 8070

Rohit Inamdar
Senior Director - CRISIL Ratings
CRISIL Limited
B:+91 124 672 2200

Vikram Iyer
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 a leading 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 1,00,000 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 https://www.crisil.com/en/home/privacy-and-cookie-notice.html. You can view the Company’s Customer Privacy at https://www.spglobal.com/corporate-privacy-policy

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: https://www.crisil.com/en/home/our-businesses/ratings/regulatory-disclosures/highlighted-policies.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