Product Quantum (Rs. Cr) Long Term Rating Short Term Rating
Pass Through Certificates (PTCs) 15.37 ACUITE A- | SO | Reaffirmed -
Total Outstanding 15.37 - -
Total Withdrawn 0.00 - -
 
Rating Rationale

­Acuité has reaffirmed the long-term rating of ‘ACUITE A- (SO)’ (read as ACUITE A Minus (Structured Obligation)) to the outstanding Pass Through Certificates (PTCs) of Rs. 15.37 Cr. issued by ARTDMI TRUST1 (The Trust) under a securitisation transaction originated by ART HOUSING FINANCE INDIA LIMITED (The Originator). The outstanding PTCs are backed by a pool of secured housing and non-housing (LAP) loans with principal outstanding of Rs. 18.52 Cr.

The PTC has amortised by 12.82 percent and the outstanding PTC balance after the March '26 payout stood at Rs. 15.37 Cr.

The rating addresses the timely payment of interest and principal on monthly payment dates in accordance with the transaction documentation. The transaction is structured at par.

The rating is based on the strength of cash flows from the selected pool of contracts; the credit enhancement is available in the form of
(i) Subordinated tranche with investment by the originator of 17.00 percent of the outstanding pool principal;
(ii) Cash collateral of 4.16 percent of the outstanding pool principal; and
(iii) Excess Interest Spread of 110.51 percent of the outstanding pool principal.

About the Originator
­Delhi based, Art Housing Finance (India) Limited was incorporated in 2013. Mr. Atul Hasmukhrai Mehta, Mr. Rahul Kumar Pandey, Mr. Shrenik Suresh Shah, Mrs. Ritika Bhatia, Mr. Vipin Jain are directors of the company.
The company is a subsidiary of Yes Capital Private Limited. The company is registered with National Housing Bank under section 29A of the National Housing Bank Act, 1987 as non deposit taking Housing Finance Company. The company provides long term finance for purchase/ construction/repair and renovation of new/existing flats/houses for residential purposes. The business is conducted through its branches in India and supported by a network of agents for sourcing loans.
 
Standalone Rating of the Originator (if rated by Acuite)
­Acuite does not rate the originator
 
Assessment of the Pool
As per the initial rating, the underlying pool in the current Pass Through Certificate (PTC) transaction comprises of housing and LAP loans extended towards 318 borrowers, with an average ticket size of Rs. 9.7 lakhs, minimum ticket size of Rs. 1.2 lakhs and maximum of Rs. 39 lakhs, indicating moderate granularity. The current average outstanding per borrower stands at Rs. 8.07 lakhs. The weighted average original tenure for the pool is 250 months. The pool has weighted average seasoning of 54.09 months (minimum 13 months seasoning and maximum of 96 months seasoning). Hence, the pool is moderately seasoned. All the loans under the pool are current as on pool cut-off date. The pool’s geographical concentration is high. 44.84 percent of the borrowers are concentrated in Gujarat followed by 17.61 percent in Rajasthan. The top 10 borrowers of pool constitute 5.4 percent of the pool principal o/s.
 
Transaction Structure
­The rating addresses the timely payment of interest and principal on monthly payment dates in accordance with the transaction documentation. The transaction is structured at par.
 
Brief Methodology
­Parameters considered are seasoning of the pool, pool vs portfolio, portfolio cuts, amortisation of the pool, internal cash flow modeling, pool characteristics, static pool, dynamic DPDs to assign rating.
 
Legal Assessment
­The rating is based on the fulfilment of the structure, terms and covenants detailed in the executed trust deed, servicing agreement, legal opinion, accounts agreement, assignment agreement and other documents relevant to the transaction.
 
Key Risks

Counter Party Risks
­The pool has average ticket size of Rs. 9.7 lakhs, minimum ticket size of Rs. 1.02 lakhs and maximum of Rs. 39 lakhs. Considering the vulnerable credit profile of the borrowers, the risk of delinquencies/defaults are elevated. These risks of delinquencies are partly mitigated, considering the efficacy of the originator’s origination and monitoring procedures.
Concentration Risks
­The pool is moderately granular, i.e. underlying assets in the pool are in nature of secured home loans and loan against property extended towards 318 individual borrowers, hence the risk is moderately mitigated. Also, there is considerable geographical concentration in the pool, since 44.84 percent of these borrowers are concentrated in Gujarat followed by 17.61 percent in Rajasthan, which is partially mitigated as the pool is spread across various branches. The top 5 borrowers of pool constitute 5.4 percent of the pool principal o/s.
Servicing Risks
­There is limited track record of servicing PTCs, since this one of the initial PTC transactions for the originator. Also, the vintage of the originator in this portfolio is low. Therefore, the servicing risk for the transaction remains high.
Regulatory Risks
­In the event of a regulatory stipulation impacting the bankruptcy remoteness of the structure, the payouts to the PTC holders may be impacted.
Prepayment Risks
­The pool is subject to prepayment risks since rate of interest is significantly high and borrowers may be inclined to shift to low cost options (based on availability). Further, the asset class being housing loans, the risk of prepayment remains high. In case of significant prepayments, the PTC holders will be exposed to interest rate risks, since the cash flows from prepayment will have to be deployed at lower interest rates.
Commingling Risk
­The transaction is subject to commingling risk since there is a time gap between last collection date and transfer to payout account.
Credit Enhancements (CE)
­The rating is based on the strength of cash flows from the selected pool of contracts; the credit enhancement is available in the form of
(i) Subordinated tranche with investment by the originator of 17.00 percent of the outstanding pool principal;
(ii) Cash collateral of 4.16 percent of the outstanding pool principal; and
(iii) Excess Interest Spread of 110.51 percent of the outstanding pool principal.
 

Rating Sensitivity

Potential triggers (individual or collective) for an upward rating action:
  • Sustained reduction in delinquencies and overdues, in the underlying pool.
  • Build-up of excess interest spread or improvement in cash collateral position, that enhances protection for PTC payouts.
Potential triggers (individual or collective) for a downward rating action:
  • ­­Deterioration in Originator’s Credit Profile and asset quality, with GNPA greater than 3 percent
  • Increase in Delinquencies or Weakening Pool Behavior
All Covenants
The following covenant is included in the transaction structure: On each Payout Date the amounts present in the collection and payment account by way of: Proceeds realised by the Trustee from the Receivables in the Collection Period immediately preceding the relevant Payout Date and deposited in the collection and payment account by the Servicer; Any amounts then available in the collection and payment account; and Amounts drawn, to the extent necessary, from the Credit Enhancement and transferred to the collection and payments account in accordance with the Transaction Documents, shall be utilized by the Trustee as per the waterfall mechanism.
The Facilities comprising the Pool have been selected on the basis of the criteria specified below, as on the Pool Cut Off Date
  1. Each Facility should:
  1. be existing at the time of selection, and must not have been terminated or prepaid;
  2. be compliant with all the applicable "know your customer" requirements prescribed by the RBI and the applicable provisions of the Reserve Bank of India (Know Your Customer (KYC)) Directions, 2016;
  3. be classified as a "standard asset" in the books of the Seller (in accordance with the criteria prescribed by the RBI and/or the NHB);
  4. be in the form of housing loans and/or loans against property;
  5. have been fully disbursed;
  6. have a fixed repayment schedule and should not be in the nature of revolving credit facilities (such as cash credit accounts, credit card receivables etc.);
  7. have been granted in Indian Rupees and should be repayable in Indian Rupees;
  8. have a monthly payment/repayment frequency;
  9. have a residual maturity of at least 365 (three hundred and sixty five) days; and
  10. have a maximum original tenure of 25 (twenty five) years.
  1. The minimum holding period of each Facility comprising the Pool should comply with the thresholds prescribed under the Securitisation Directions.
  2. The MRR in respect of the Facilities comprising the Pool should comply with the requirements prescribed in the Securitisation Directions.
  3. In the Pool:
  1. no Facility should have any overdues (i.e., is classified as "current" and "0 DPD" (zero days past due)" in the books of the Seller);
  2. no Facility should have been "restructured" or "rescheduled" in the books of the Seller (in accordance with the criteria prescribed by the RBI and/or the NHB);
  3. no Facility should have been classified as a "non-performing asset" in the books of the Seller (in accordance with the criteria prescribed by the RBI and/or the NHB);
  4. no Obligors have any history of restructuring;
  5. no provisions (as of the Pool Cut Off Date or at any time prior to the Pool Cut Off Date) have been made in respect of any loans/financial assistance provided to any of the Obligors;
  6. the Seller has not initiated, and does not intent to initiate any legal, recovery or repossession proceedings against any of the Obligors;
  7. there are no outstanding obligations on the part of Seller to be performed under the relevant Facility Agreements and the other Underlying Documents;
  8. no Facility should have a bullet repayment schedule for principal and interest.
  9. no Security Interest should have been created over the Secured Assets for any facility provided by the Seller other than the Facilities comprising the Pool;
  10. no fraud or misrepresentation should have been observed in respect of any Facility.
  11. each Facility comprising the Pool should be truly, legally and effectively owned by the Seller; and
  12. the Security Interest created over the Secured Assets should have been duly created and perfected, and should be enforceable

 
 
All Assumptions
­Acuité has arrived at a base case delinquency estimate basis its analysis of the company's historical static pool and further applied appropriate stress factors to the base loss figures to arrive at the final loss estimates. The loss estimate also consider the risk profile of the particular asset class, the borrower strata, economic risks, collection efficiency over the past several months as well as the credit quality of the originator. Acuité also has simulated the potential losses to an extent by applying sensitivity analysis.
 
Liquidity Position
Adequate
­The liquidity position in the transaction is adequate. Credit Enhancement is available in the form of:
(i) Subordinated tranche with investment by the originator of 17.00 percent of the outstanding pool principal;
(ii) Cash collateral of 4.16 percent of the outstanding pool principal; and
(iii) Excess Interest Spread of 110.51 percent of the outstanding pool principal.
 
Outlook: Not applicable
­
 
Key Financials - Originator
­
Particulars Unit FY25 (Actual) FY24 (Actual)
Total Assets Rs. Cr. 530.99 495.41
Total Income* Rs. Cr. 68.41 65.23
PAT Rs. Cr. 23.89 22.52
Net Worth Rs. Cr. 453.18 436.74
Return on Average Assets (RoAA) (%) 4.66 4.77
Return on Average Net Worth (RoNW) (%) 5.37 5.25
Debt/Equity Times 0.15 0.11
Gross NPA (%) 0.74 1.65
Net NPA (%) 0.39 0.79
*Total income equals to Net Interest Income plus other income
 
Status of disclosure of all relevant information about the Obligation being Rated
Non-public information
­
 
Any Other Information
­None
 
Note on complexity levels of the rated instrument
Applicable Criteria
• Application Of Financial Ratios And Adjustments: https://www.acuite.in/view-rating-criteria-53.htm
• Default Recognition: https://www.acuite.in/view-rating-criteria-52.htm
• Explicit Credit Enhancements: https://www.acuite.in/view-rating-criteria-49.htm
• Non-Banking Financing Entities: https://www.acuite.in/view-rating-criteria-44.htm
• Securitized Transactions: https://www.acuite.in/view-rating-criteria-48.htm

Date Name of Instruments/Facilities Term Amount (Rs. Cr) Rating/Outlook
28 Mar 2025 Pass Through Certificate Long Term 17.63 ACUITE A- (SO ) (Reaffirmed)
29 Mar 2024 Pass Through Certificate Long Term 21.32 ACUITE A- (SO ) (Assigned)
04 Jan 2024 Pass Through Certificate Long Term 21.32 ACUITE Provisional A- (SO ) (Assigned)
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Rating History - Originator (if applicable):
­Acuite does not rate the originator
 
Lender’s Name ISIN Facilities Date Of Issuance Coupon Rate Maturity Date Quantum
(Rs. Cr.)		 Complexity Level Rating
Not Applicable INE0SOA15013 Pass Through Certificate 30 Dec 2023 11.00 15 Sep 2046 15.37 Highly Complex ACUITE A- | SO | Reaffirmed
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