India Securitisation Market Projected at ₹2.7 Lakh Crore in FY27 as NBFCs Lead Growth

According to ratings agency ICRA, India’s securitisation market is projected to expand from ₹2.6 lakh crore to ₹2.7 lakh crore in FY2026-27. Volumes in FY2025-26 stood at approximately ₹2.5 lakh crore, and the market has begun the current fiscal year on a strong footing, with April-June volumes estimated at around ₹61,000 crore, up about 20% year-on-year.

Why Is the Indian Securitisation Market on a Growth Path?

ICRA attributed the expected expansion primarily to non-banking financial companies, which continue to use securitisation as a liquidity and funding tool. Securitisation allows lenders to pool loans and sell them to investors, freeing up capital in the process.

The agency noted that even as some larger NBFCs reduced their sell-down volumes, several new and smaller non-bank lenders stepped up their use of securitisation as a primary funding route.

Q1 FY27 Securitisation Volumes: Key Numbers

Which Asset Classes Led Q1 FY27 Securitisation Activity?

Gold loans emerged as the largest asset class in the April-June quarter, accounting for around 28% of total securitised volumes. Vehicle loans accounted for 25%, while mortgage and microfinance loans each accounted for about 13%.

ICRA also reported a moderation in the securitisation of MSME and business loans, linking it to investor caution amid headwinds in that segment. Joglekar noted that the microfinance sector showed signs of operational stability, with improving disbursements and collection efficiencies helping revive investor interest.

How Did Transaction Structures Shift in Q1?

Direct assignments accounted for 53% of Q1 securitisation volumes, overtaking pass-through certificates, which made up the remaining 47%.

Gold loan and mortgage portfolios were primarily securitised through the direct assignment route, while vehicle and microfinance loans were largely structured as pass-through certificates.

Smaller NBFCs Fill the Gap as Banks Pull Back

Nearly all Q1 FY27 securitisation volumes came from non-bank lenders, continuing a trend that began in the previous financial year, as banks reduced their activity in this market.

Within the NBFC space, the participation mix also shifted. Larger players pulled back on sell-down volumes, while newer and smaller non-bank lenders increasingly turned to securitisation as a core funding channel.

Final Outlook

ICRA’s projection places the securitisation market on a steady growth trajectory through FY27, anchored by NBFC funding demand. The changing asset class mix, with gold loans and vehicle loans leading while MSME securitisation moderates, points to evolving investor preferences. Whether smaller NBFC participation and microfinance stability hold through the remaining quarters will be the key variable to watch.