NBFCs Drive Securitisation Growth; Volumes Touch ₹1.87 Lakh Crore in FY26

Securitisation volumes rose to Rs 1.87 lakh crore in nine months of fiscal 2026 and originations by NBFCs grew 35 per cent in the third quarter, said Credit Rating Information Services of India Limited (CRISIL) report released on Thursday here.

The rating agency noted that bank originations continued their momentum in the first nine months of this fiscal and grew by 5 per cent (on-year) to Rs 1.87 lakh crore in comparison to Rs 1.78 lakh crore in the same period last fiscal.

Aparna Kirubakaran, Director of CRISIL Ratings, said, “The strong growth in originations by NBFCs was driven by large volumes in securitisations of gold loans and vehicle loans. This along with an increase in the base of originators carrying out securitisations, has supported market activity. On the demand side, the market also benefited from priority sector loan (PSL) demand as banks faced challenges in meeting their PSL targets, and resolved them by investing in securitisations.”

In the third quarter alone, securitisation volumes stood at nearly Rs 63,000 crore, broadly in line with the levels seen in the corresponding quarter of the previous fiscal. While banks had played a meaningful role in securitisation activity during the same quarter last year, their contribution this fiscal was negligible.

This gap was effectively bridged by NBFCs, which significantly increased their market presence.

Non-Banking Finance Companies (NBFCs) originations recorded a sharp year-on-year growth of about 35 per cent in the third quarter, supported by strong issuance volumes in gold loans and vehicle loan pools.

As a result, NBFCs accounted for nearly 97 per cent of total retail securitisation volumes during the quarter, compared with about 71 per cent in the same period last year, highlighting a decisive shift in the originator mix.

The market also saw a notable broadening of the originator base. Around 200 entities participated in securitisation transactions during the first nine months of the fiscal, up from roughly 150 in the corresponding period last year. The increase was largely led by NBFCs, indicating wider adoption of securitisation as a funding tool across the sector.

Pass-through certificate (PTC) transactions continued to dominate the market, accounting for around 62 per cent of overall volumes during the nine-month period.

This included a few large transactions from non-financial sector entities as well. Direct assignment (DA) transactions gained traction in the third quarter, driven by a rise in sell-downs of gold loan and microfinance portfolios.

Operational changes following new co-lending guidelines have increased complexity for lenders, prompting some originators to move away from co-lending structures in favour of direct assignment transactions. This shift is expected to support sustained growth in DA volumes over the near to medium term.

Among retail asset classes, gold loan securitisation witnessed a sharp increase, with its share rising to about 12 per cent of total volumes during the nine-month period, compared with just one per cent in the same period last year. However, activity in this segment was largely concentrated with a single leading originator that accounted for most of the issuance.

Vehicle loans continued to form the largest share of securitisation volumes, though their proportion declined marginally to around 43 per cent from 48 per cent a year earlier. Despite this, NBFC-originated vehicle loan pools recorded growth of roughly 14 per cent over the nine-month period, supported by higher issuance from both established players and new entrants.

Mortgage-backed securitisation saw a decline in share to about 17 per cent from 23 per cent in the previous year’s comparable period, primarily due to subdued activity by a large private bank that had contributed significant volumes last fiscal.

The microfinance sector maintained a steady share of around 12 per cent, despite facing stress that affected loan disbursements. Foreign banks also showed interest in investing in microfinance PTCs to meet priority sector lending requirements.