India's securitisation volumes hit ₹61,000 crore in the first quarter of FY27, a 20% increase from the previous year. NBFCs drove this growth, with gold loans becoming the largest asset class at 28% of the total volume. ICRA expects annual volumes to reach up to ₹2.7 lakh crore for the full fiscal year.
The Indian securitisation market saw a strong start to the 2026-27 fiscal year, recording volumes of approximately ₹61,000 crore in the April-June quarter. This marks a 20% growth compared to the same period in the previous year. Securitisation is a process where financial institutions bundle loans—like gold, vehicle, or mortgage loans—and sell them to investors as securities to manage liquidity and raise fresh capital for further lending.
NBFCs Lead Market Activity
Non-banking financial companies (NBFCs) were the primary drivers of this activity, contributing significantly to the total volume. While many large banks have scaled back their participation in the securitisation market, smaller and mid-sized NBFCs have stepped in, using this route to secure funding. Issuances from NBFCs grew by 27% year-on-year, showing that these lenders continue to rely on this market to maintain their loan book growth and manage cash flow.
Gold Loans Gain Market Share
A significant shift observed in the first quarter is the rise of gold loans, which now account for 28% of total securitised volumes, making it the leading asset class. This is the highest level of gold loan securitisation seen since the 2020-21 period. Other major contributors included vehicle loans, which made up 25% of the market, followed by mortgage loans and microfinance, each contributing 13%.
Market Dynamics and Investor Caution
The preference for transaction structures has also shifted. Direct assignments, where loans are transferred directly between parties, accounted for 53% of the total volume, overtaking pass-through certificates. This indicates that originators are increasingly choosing direct transfer routes for assets like gold and mortgages. Conversely, investors have shown more caution toward MSME and business loans, leading to a slight slowdown in securitisation volumes for these specific segments. This caution is often tied to concerns regarding credit quality and economic stability for small businesses.
Looking ahead, ICRA estimates that total securitisation volumes for the full financial year 2026-27 will likely fall between ₹2.6 lakh crore and ₹2.7 lakh crore, up from ₹2.5 lakh crore in the previous year. For investors in the financial sector, the key areas to watch will be the collection efficiencies in the microfinance segment and whether the demand for gold loans remains strong, as these factors directly influence the volume of paper coming to the market and the risk profiles of the underlying loan pools.