The shift is stark. Gold loans accounted for a quarter of India’s retail securitisation market in the first half of FY27, more than doubling their share from a year earlier. The overall market expanded 42% year-on-year to a record ₹1.46 lakh crore, compared with ₹1.03 lakh crore in the same period last fiscal. Crisil Ratings highlighted this structural shift in its October 8 release, noting that the figures exclude large transactions by non-financial sector entities to ensure a like-for-like comparison.
Behind this surge lies a combination of aggressive portfolio expansion by gold financiers and hungry investor demand. Gold loans emerged as the fastest-growing asset class in the retail securitisation landscape. Vehicle loans, however, remain the largest single asset class but have seen their relative weight shrink. They now account for 33% of overall volumes, down from 42% a year earlier, even as they grew 13% year-on-year. Mortgage-backed securitisation contributed 17% of volumes, growing 15% YoY, while the combined business loan, personal loan, and microfinance segments grew 30%.
The mix of how these loans are securitised is also changing. The share of pass-through certificates (PTCs) in overall volumes dropped to 47% in H1 FY27 from 68% in H1 FY26. Direct assignments (DAs) now make up the remaining 53%. This shift is largely driven by gold loans, which are predominantly executed through DAs where lenders directly transfer loan pools to buyers, rather than the PTC route where investors receive cash flows from underlying assets. Vehicle loans continue to rely heavily on the PTC structure.
Investor behavior is shifting as much as the asset mix. Banks accounted for nearly 90% of investments in securitised assets during the first half. Foreign banks increased their participation to nearly 20%, driven by priority sector lending requirements and attractive risk-adjusted returns, particularly in non-priority sector loan pools. Payal Anand, Associate Director at Crisil Ratings, noted that this rising participation by foreign banks and other non-conventional investors signals the maturation of the securitisation market.
Issuance activity was heavily skewed towards the second quarter, which accounted for around 60% of first-half retail securitisation volumes. Issuances exceeded ₹86,000 crore in Q2, compared with ₹54,000 crore in the corresponding period last fiscal. NBFCs, excluding government-owned entities, remain the dominant originators, accounting for around 95% of retail securitisation issuances during the period. The market's ability to absorb these varying asset classes and structures suggests a continued deepening of India's debt markets.