India’s securitisation market remained strong in FY26, with retail transactions experiencing a slight decline, as per a report. Retail securitisation volumes decreased by about 6% to Rs 2.53 lakh crore in FY26, but the sector outlook remains positive due to favorable macroeconomic conditions.
The report highlighted key factors such as regulatory backing through Priority Sector Lending guidelines, enhanced scalability for originators, and the ability to securitise high-quality assets. It also emphasized the consistent performance of securitised pools over time.
Particularly, the Residential Mortgage-Backed Security (RMBS) segment offers significant growth opportunities. The market expanded by 1% when wholesale loan pass-through certificates (PTCs) were considered, with Timely Interest and Ultimate Principal structures dominating the market.
Moreover, vehicle loan pools led Pass-Through Certificate issuances, while mortgage-backed pools were prominent in direct assignment activity. The report also mentioned a rise in PTC volumes supported by MFI loans, reflecting changing investor preferences amid sector uncertainties.
According to Mehul Pandya, MD and Group CEO of CareEdge, retail PTCs have shown stable performance with minimal credit losses since 2010. Despite some downgrades in microfinance and unsecured business loan pools, the sector is anticipated to progress positively, backed by its structural strengths.
The market’s future growth hinges on increased participation from major originators, enhanced institutional investor involvement, and a more dynamic secondary market. While facing challenges like declining PSL premiums and uncertainties in certain segments, improved transparency, standardized reporting, and broader market engagement could fuel the market’s expansion.
