India’s securitisation market witnessed a nearly 9 percent year-on-year rise in the first quarter of 2025–26, with overall volumes reaching approximately ₹49,000 crore (USD 5.86 billion), compared to ₹45,000 crore in the same period last fiscal, according to a Crisil Ratings report. The increase was primarily fuelled by a surge in issuances from large non-banking financial companies (NBFCs), which helped offset a decline in bank-originated volumes.
NBFCs contributed 92 percent of the securitisation market during the April–June 2025 quarter, up from 74 percent for the full fiscal year 2024–25. The top 20 NBFC originators alone accounted for approximately 67 percent of the Q1 share, a sharp increase from 56 percent in Q1 FY25. These firms tapped the market consistently to diversify their funding base.
Crisil Ratings director Aparna Kirubakaran observed that the leading NBFCs maintained a steady focus on securitisation to diversify resource profiles. In contrast, small and mid-sized NBFCs—primarily in microfinance, unsecured personal loans, and business lending—saw muted originations amid cautious sentiment from both lenders and investors. Bank-originated securitisations remained subdued, largely due to improved credit-deposit ratios at major private sector banks.
In terms of asset class composition, vehicle loans (including commercial vehicles and two-wheelers) retained a 41 percent share of total volumes. Mortgage-backed loan securitisation fell to 21 percent from 25 percent in Q1 FY25, largely due to reduced origination activity by a major private bank.
Notably, gold loan securitisation jumped to 11 percent of the total volume after being negligible in the year-ago quarter, driven by the lifting of regulatory restrictions on a key lender. Securitisation backed by microfinance loans declined to 11 percent from 14 percent as the sector responds to rising delinquencies through tighter underwriting and moderated disbursal. Personal and business loan-backed securitisations also declined to 9 percent and 7 percent respectively, reflecting slower growth.
The distribution of securitisation structures also shifted. The share of pass-through certificates (PTCs) rose to 58 percent—its highest in a decade—while the share of direct assignments (DAs) dropped to 42 percent. This reflected the segmental performance, particularly as DA transactions are commonly used in mortgage, microfinance, and business loan segments.
The report highlights that India’s securitisation ecosystem continues to evolve, with leading NBFCs cementing their role in driving market depth while the landscape across asset classes and instruments undergoes rebalancing.
