India securitisation hits ₹1.47 trillion record in H1

India's securitisation market reached a record ₹1.47 trillion in H1 FY27, up 42 percent from the comparable period, signaling deeper non-bank credit funding through pooled loan sales. Reaction pending.

The rating agency attributed the increase to gold loan securitisation and a recovery in vehicle loan transactions. It projected FY27 securitisation volume at ₹2.6 trillion-₹2.7 trillion, above the ₹1.47 trillion already recorded in the first half.

Gold loans widen credit channels

Data showed gold loan pools became a larger contributor to issuance as lenders used securitisation to recycle balance sheets and fund new loans. Vehicle finance transactions also recovered from softer activity, adding another large asset class to first-half volumes.

For lenders, stronger securitisation demand can lower reliance on direct borrowing if investors continue to absorb pools at workable spreads. For investors, the shift increases exposure to retail collateral performance, underwriting standards and collection cycles rather than only issuer-level credit.

The credit market effect depends on whether issuance stays broad across asset classes. If gold loan and vehicle pools remain active, non-bank lenders can extend funding capacity without adding the same volume of on-balance-sheet debt; if investor appetite narrows, originators may return to bank lines or slow loan growth.

The next test comes by March 31, 2027, when FY27 closes and the ₹2.6 trillion-₹2.7 trillion projection can be measured against final issuance.