New Delhi, July 7(IANS) Securitisation volume rose nearly 9 per cent to around Rs 49,000 crore in the first quarter (April-June) of 2025-26, compared with Rs 45,000 crore in the same quarter of the previous financial year, according to a Crisil Rating report released on Monday.

Issuances by non-banking financial companies (NBFCs), led by large players, posted a strong year-on-year growth of about 24 per cent. This helped offset the lower origination volume by banks, supporting the overall securitisation market volume, the report states.

Securitisation in banking is a process where illiquid assets like loans are pooled together, repackaged, and sold as securities to investors. This allows banks to free up capital, transfer risk, and provide investors with access to diversified investments.

Overall, NBFCs contributed 92 per cent of the securitisation market in the first quarter of fiscal 2026 as compared to 74 per cent for the whole of fiscal 2025. In fact, the share of the top 20 NBFC originators increased to around 67 per cent in the first quarter this fiscal compared to 56 per cent for the first quarter of last fiscal, according to the report.

Crisil Ratings director Aparna Kirubakaran said: “The top NBFCs have remained steadfast in tapping the securitisation market as a strategy for resource profile diversification. On the other hand, originations by small and mid-sized NBFCs – mostly present in microfinance, unsecured personal loans and business loan segments have moderated as both, the NBFCs and investors, remain cautious in these segments. Bank securitisation, which is dominated by a few large private sector banks, saw lower originations, coinciding with steady improvement in their overall credit-deposit ratio.”

In terms of asset classes, the share of vehicle loans (including commercial vehicles and two-wheelers) held steady at 41 per cent in the first quarter of this fiscal. The share of mortgage-backed loans decreased to around 21 per cent from 25 per cent in the first quarter of the previous fiscal. However, this decline is largely attributed to lower volumes originating from a large private bank, the report states.

On the other hand, the share of gold-loan securitisation surged to 11 per cent in the first quarter from virtually negligible levels in the corresponding quarter of the previous fiscal, supported by the lifting of regulatory curbs on a leading originator.

Securitisation backed by microfinance loans declined to 11 per cent from 14 per cent as the industry is trying to emerge out of rising delinquencies by focusing on strengthening underwriting processes and scaling back disbursements in the near term.

Meanwhile, the share of personal loans and business loans decreased to around 9 per cent (vs 11 per cent) and 7 per cent (vs 9 per cent respectively, reflecting a moderation in growth in the first quarter.

As a result of differentiated performance across asset classes, the share of pass-through certificates (PTCs) rose to a decadal high of 58 per cent while that of direct assignments (DAs) dropped to 42 per cent. Notably, DA is the preferred route of securitisation for mortgage-backed loans, and to an extent, even microfinance and business loans have seen a reasonable quantum of DA transactions in the past, the report added.

–IANS

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