Crisil Ratings in its latest report has said that the first half of the current fiscal year (H1FY27) saw a continued steady momentum in India's retail securitisation market, aided by a sharp rise in gold loan securitisation. During the period, retail securitisation volumes grew 42 per cent year-on-year to a record Rs 1.46 lakh crore from 1.03 lakh crore in the corresponding period last fiscal. The second quarter (Q2FY27) accounted for around 60 per cent of the first-half volumes, with issuances exceeding Rs 86,000 crore compared with Rs 54,000 crore in the same period last fiscal. Securitisation entails a lender bundling loan receivables and passing them on to another lender, often at a discount, to meet liquidity requirements. Often, the investing bank acquires the portfolio to comply with mandatory priority sector lending requirements.
According to the report, non-banking financial companies (NBFCs) continued to dominate the market, accounting for around 95 per cent of issuances during the first half. Vehicle loans continued to be the largest asset class, accounting for 33 per cent of total retail securitisation volumes in H1FY27. Gold loan securitisation emerged as the fastest-growing segment, supported by strong portfolio growth among gold financiers and robust investor demand. Its share of overall retail securitisation volumes more than doubled to 25 per cent from 11 per cent a year earlier.
The report said retail mortgage-backed securitisation recorded 15 per cent growth, while volumes in the microfinance and combined business and personal loan segments increased 30 per cent. Changing asset mix also led to a shift in the mode of securitisation, with the share of pass-through certificates declining to 47 per cent from a decadal high of 68 per cent in the first half of the previous fiscal year. Banks accounted for nearly 90 per cent of investments, while foreign banks' share rose to around 20 per cent, driven by priority sector lending requirements and attractive risk-adjusted returns.
