NBFCs Drive India’s Securitisation Market to Record ₹2.55 Lakh Crore in FY26

India’s securitisation market just hit a new high, and NBFCs are the ones pushing the throttle.

Transaction volumes climbed to an all-time high of ₹2.55 lakh crore, marking a 9% year-on-year rise. On the surface, it looks like steady expansion.

But underneath, the market has undergone a decisive shift—one driven almost entirely by non-banking financial companies (NBFCs).

NBFCs accelerated hard, clocking a 30% surge in originations through the year.

That surge did more than fuel growth—it filled a widening vacuum left by banks.

Their share of total originations dropped sharply to just 3% in FY26, down from 26% a year ago, fundamentally altering the balance of power in the market.

The closing quarter captured this momentum in full stride. Between January and March alone, securitisation volumes crossed ₹65,000 crore, up 20% compared to the same period last year.

The year, in effect, ended on a sprint—driven by NBFC demand for liquidity and balance sheet flexibility.

Even as volumes scaled, participation broadened.

The number of originators expanded to over 190, indicating a gradual deepening of the market.

At the same time, concentration at the top eased slightly—the share of the top 20 originators declined to 65% from 71% in FY25. It’s still a top-heavy market, but the edges are widening.

“Robust performance of cherry-picked pools and structural credit enhancements in pass-through certificates (PTCs) continue to support investor confidence," she added.

Beneath this expansion, the asset mix is shifting in visible ways.

Vehicle loans continue to anchor the market, accounting for 40% of total securitisation volumes.

But their dominance is easing—they held a 47% share just a year ago. In contrast, gold loan-backed securitisation has surged, emerging as the second-largest asset class with a 15% share, overtaking mortgages, which have slipped to 14%.

The decline in mortgage-backed securitisation is largely tied to subdued participation from a major private sector bank, creating space for other asset classes to gain ground.

Meanwhile, business and personal loans together account for 17% of the market, while microfinance originations have edged up to 12%, reflecting steady activity in unsecured lending segments.

If the asset mix is evolving, so is the structure of transactions.

Pass-Through Certificates (PTCs) have strengthened their grip on the market, now accounting for nearly 60% of total securitisation volumes—an all-time high.

The shift is particularly pronounced in unsecured segments like microfinance, where investor caution following asset quality stress has driven demand for structures with stronger credit enhancements.

“PTCs are clearly gaining favour across asset classes, especially in the unsecured space,” said Payal Anand, Associate Director, Crisil Ratings. “Investors are increasingly preferring the PTC route due to the support provided by external enhancements.”

The numbers underline that shift. PTCs accounted for 69% of microfinance securitisation transactions in FY26, a sharp jump from just 30% in FY25.

Direct Assignments (DAs), however, haven’t disappeared—they continue to dominate relatively stable segments such as mortgages and gold loans, where asset quality is more predictable and structural enhancements are less critical.

On the demand side, the investor base is quietly diversifying.

Public and private sector banks remain the primary investors, anchoring most transactions.

But interest from mutual funds and foreign banks is rising, while insurance companies and pension funds are selectively entering the space. This widening pool of capital is adding both depth and resilience to the market.

Looking ahead, the trajectory appears clear.

With banks pulling back and NBFCs stepping forward, securitisation is no longer just a funding tool—it is becoming central to how NBFCs manage liquidity, optimise capital, and sustain growth.

As these dynamics continue to play out, NBFCs are expected to remain the primary drivers of issuance into FY27, shaping not just volumes, but the structure and direction of the market itself.

(With inputs from ANI)