enter, evaluate and execute
The Vivriti Marketplace
The debt financing market in India is complex, characterised by a large number of counterparties — issuers and lenders / investors, vanilla and structured products, idiosyncratic needs and varying regulations. As a result, the market has been characterized by information asymmetry, relationships, manual execution, and inefficiency
This market stands at the cusp of being disrupted thanks to the “Vivriti Marketplace”, a marketplace for credit on tech for institutional borrowers to issue debt, discover investors, execute deals and raise capital efficiently and competitively.
In our journey of developing the Vivriti Marketplace we have taken a three-pronged approach: Enter, Evaluate, Execute. While the Marketplace will cater to all debt products — loans, bonds, commercial paper, asset backed securitisation, preference shares etc. — we use securitisation to illustrate our approach.
enter — Automation and Self-Service
Traditionally, securitization deals are executed through a heavily manual process that involves extensive communication between counterparties and stakeholders, sanitizing and processing the original pool of loans in arbitrary formats, aggregating the loans in the pool, removing risky loans, generating commercials/waterfall, and coordinating with our stakeholders till the final settlement of the deal. In a highly efficient manual process, this may take 4–5 working days.
In the Vivriti Marketplace, a client by initiates a securitization transaction by uploading two Excel sheets containing the loan pool details. Our clients use a varied set of information systems each with their own idiosyncrasies. Missing data, esoteric formats, extraneous data, badly formatted data, incorrect data are all par for the course. The onus is on us to parse, understand, sanitize, and normalize the data in the files. We use a combination of user input, online machine learning, simple and advanced algorithms, stemming, regular expressions matching, Levenshtein distance near matching, and bucketing of formats to process the files instantly and provide feedback to the clients on the size of the accepted pool, accepted and rejected loans, and reasons for their rejection. We have achieved 100% accuracy in processing files from existing clients and >75% accuracy in processing pool files from new clients.
Pool selection is the act of cherry picking the pool to transform it, reduce risk and make it attractive for investors. In the Marketplace, we have used a simple greedy approach to perform pool selection with the click of a button within seconds. Further, our pool selection module applies regulatory filters and protects our clients from becoming non-compliant.
evaluate — Analytics and Data Science
Today, the structuring process is manual and is reliant upon an expert using his experience to structure the ideal Pass Through Certificates (PTCs). We intend to leverage public available and Vivriti proprietary data, mathematical models, artificial intelligence, and heuristics to develop intelligence into an automated selection and structuring process.
For our investors and clients to make informed decisions, we will provide data and tools including detailed client information, performance of the client’s past debt issuances, current market trends amongst others through the Marketplace. Investors can evaluate the credit worthiness of borrowers, their leverage, balance sheets, promoter, board and director information and Vivriti’s own evaluation of the client. Once investors make bids, the client can evaluate bids using tools and data available on the Marketplace.
execute — Workflows and Coordination
Private debt issuances are, by their very nature, customized transactions that are fine-tuned and executed after much parleying — over 160 steps with interdependencies. Several counterparties — rating agencies, legal firms, auditors, trustees, clients, investors and several internal teams, are involved and perform activities before deal consummation. Tracking the flow of a transaction is painstaking, error prone and laborious.
In the Marketplace, we have developed a configurable workflow engine to solve this. We call this workflow engine, the Tasks Infrastructure. We also built a componentized UI engine, which dynamically builds and displays the tasks, and their statuses to each of the counterparties.
The Marketplace has simplified the work of Vivriti teams, our counterparties, stakeholders, clients and investors and has helped them coordinate and execute better. We will also empower our clients and investors — with the help of data and machine learning — by allowing self-service pool selection to meet their specific liquidity and pricing needs / investment needs.
The Marketplace has simplified our securitization execution workflow reducing manual efforts, turnaround time and errors by 95%. Innovation in automation is a key for Vivriti to scale exponentially.
