S&P Sees Scope for Higher Ratings on India’s Securitisation Deals Post Sovereign Upgrade

S&P Global Ratings on Wednesday said the recent upgrade of India’s sovereign rating could pave the way for stronger global scale ratings on the country’s securitisation transactions and structured finance market.

Total securitisation issuance in India touched ₹2.35 trillion in 2024-25, marking a 23.7% growth since 2019-20, the agency noted.
In August, S&P raised India’s long-term unsolicited sovereign rating to ‘BBB’ from ‘BBB-’, citing economic resilience and steady fiscal consolidation.

S&P said securitisation transactions directly exposed to sovereign obligations will be capped at the sovereign rating. However, transactions with no such direct exposure could be rated up to six notches higher than India’s rating, with a maximum of ‘AA’, depending on their sensitivity to sovereign default risk and robustness of structure.

As part of the sovereign upgrade, S&P also revised its transfer and convertibility assessment for India to ‘A-’ from ‘BBB+’. While structured finance securities in foreign currency cannot be rated above this ceiling, domestic currency issuances remain unconstrained.

India’s securitisation market has largely been domestic so far, though it included a $300 million cross-border deal in early 2024, S&P said.