India's retail asset-backed securities market shows potential for growth
- IBEF
- July 21, 2025
India's retail asset securitisation market is set for moderate growth in FY26, with Q1FY26 volumes reaching Rs. 52,000 crore (US$ 6.04 billion), marking a 6% YoY increase. Rising investor confidence in microfinance loan-rated pools and the continued dominance of vehicle loan-backed securitisation drive this growth. The market is diversifying and becoming more resilient, as originators seek broader funding avenues and investors favour standardised instruments. A notable development in Q1FY26 was the country's first residential mortgage-backed securitisation by the RMBs Development Company. This transaction is expected to encourage more innovation and participation in mortgage-backed securities, opening new opportunities for long-term funding and risk transfer.
Securitisation is a process by which illiquid or bad financial assets are packaged into marketable securities. According to CareEdge Ratings, the retail asset securitisation market is poised for further growth, with a shift towards pass-through certificates (PTC) issuances. The market's evolution is expected to bring greater transparency, product variety, and long-term funding potential. As the market continues to develop, it will play a crucial role in providing additional funding options for originators and attractive investment opportunities for investors.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.
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