Securitisation volumes rise 5% to ₹1.87 trn in 9 months of FY26: Crisil

Securitisation volumes rose by about 5 per cent year on year to around Rs 1.87 trillion in the first nine months of the current financial year, from Rs 1.78 trillion in the same period of the previous financial year, supported largely by sustained originations from non-banking financial companies (NBFCs) despite muted participation by banks, according to a report by Crisil Ratings.

 

Volumes in Q3 FY26 stood at about Rs 63,000 crore, broadly in line with issuances seen in the corresponding quarter of the previous financial year (FY25). Notably, while banks had contributed meaningfully to securitisation volumes in the third quarter of the previous fiscal, their share was negligible this year, a gap that was offset by higher activity from NBFCs.

 

 

NBFCs posted strong year-on-year growth of 35 per cent in the third quarter, driven by robust volumes in gold and vehicle loan pools. This led to a sharp shift in the originator mix, with NBFCs accounting for about 97 per cent of overall retail volumes during the quarter, compared with around 71 per cent in the year-ago period, the report said.

 

Pass-through certificate (PTC) transactions continued to dominate volumes during the nine-month period, with their share rising to 62 per cent of total volumes, including two large deals from non-financial sector entities. The share of direct assignment (DA) transactions increased in the third quarter, led by a surge in sell-downs of gold and microfinance loan pools. In addition, increased operational complexities following new co-lending guidelines have prompted some originators to move away from co-lending structures, a trend that is expected to support sustained growth in DA volumes over the near to medium term.

 

Among retail asset classes, gold loan securitisation saw a sharp rise, accounting for 12 per cent of market volumes during the nine-month period, up from just 1 per cent a year earlier, though volumes were largely driven by a single leading originator. The share of vehicle loans, including commercial vehicles and two-wheelers, declined marginally to 43 per cent from 48 per cent in the year-ago period. However, NBFC-originated vehicle loan pools grew about 14 per cent over nine months, supported by higher issuance from existing players and large-volume transactions by new originators.

 

Mortgage-backed securitisation volumes fell to around 17 per cent from 23 per cent a year earlier, reflecting subdued activity by a large private sector bank that had been an active originator in the previous fiscal. The microfinance sector maintained a steady share of 12 per cent of total volumes, slightly higher than 11 per cent last year, despite stress in the sector that weighed on disbursements. The period also saw foreign banks exploring investments in microfinance pools through the PTC route to meet their priority sector lending requirements.

 

The share of personal and business loans edged down marginally to around 15 per cent from 16 per cent, as investors remained cautious towards unsecured asset classes and loans against property amid asset quality concerns. Banks continued to dominate the investor base, while the healthy performance of securitised pools also supported increased participation by mutual funds in PTC investments.

 

Looking ahead, securitisation volumes in the upcoming financial year are expected to remain steady as NBFCs continue to tap the market for funding. In addition, a marginal rise in banks’ credit-deposit ratios could lead to a gradual increase in bank-led originations going forward.