Crisil explains why gold loans are gaining a bigger share of India’s securitisation market

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, as portfolio growth among gold financiers and investor demand supported issuances, according to Crisil Ratings.

Gold loans' share of overall retail securitisation volumes rose to 25% in April-September 2026 from 11% in the corresponding period last fiscal. The increase came as the overall retail securitisation market grew 42% year-on-year to a record ₹1.46 lakh crore in the first half of FY27, compared with ₹1.03 lakh crore a year earlier.

The figures exclude large transactions originated by two non-financial sector entities in the year-ago period, allowing a like-to-like comparison, Crisil said in its October 8 release.

Crisil attributed the rise in gold loan securitisation to strong portfolio growth among gold financiers and buoyant investor demand. Gold loans emerged as the fastest-growing asset class in the retail securitisation market during the period.

Vehicle loans continued to be the largest asset class, accounting for 33% of overall volumes, down from 42% a year earlier. Mortgage-backed securitisation accounted for 17% of volumes, microfinance for 12%, and other categories—including business loans, personal loans, education loans and lease-backed transactions—for the remaining 14%.

How gold loans are changing the securitisation mix

The rise in gold loans has also influenced the mode through which retail loans are securitised, Crisil said.

The share of pass-through certificates (PTCs) in overall securitisation volumes declined to 47% in H1FY27 from 68% in H1FY26. Direct assignments (DAs) accounted for the remaining 53%.

While vehicle loans continue to be securitised predominantly through the PTC route, the rising share of gold loans, which are largely executed through DAs, has resulted in an increase in the share of DA transactions.

DEEPANSHU SINGLA, DIRECTOR AT CRISIL RATINGS

Under a direct assignment, a lender directly transfers a pool of loans to a buyer. Under the pass-through certificate route, investors receive cash flows generated by an underlying pool of assets through the securities issued against it.

Vehicle loan securitisation volumes grew around 13% year-on-year, following a recovery in the second quarter after relatively subdued activity in the first quarter. Mortgage-backed securitisation volumes increased 15%, while the combined business loan, personal loan and microfinance segments registered growth of 30%, according to Crisil.

The second quarter accounted for around 60% of first-half retail securitisation volumes. Issuances exceeded ₹86,000 crore in the quarter, compared with ₹54,000 crore in the corresponding period last fiscal.

Banks remain the biggest investors

Banks accounted for nearly 90% of investments in securitised assets during H1FY27, while foreign banks increased their share to nearly 20%, Crisil said.

Foreign banks' participation was driven by priority sector lending (PSL) requirements and attractive risk-adjusted returns, particularly in pools backed by non-priority sector loans. Non-banking financial companies (NBFCs) also increased their participation as investors.

Payal Anand, Associate Director, Crisil Ratings, said the participation of foreign banks and other non-conventional investors reflected the evolution of the securitisation market, with yields and access to diversified retail loan portfolios supporting investment decisions.

NBFCs, including housing finance companies but excluding government-owned NBFCs, accounted for around 95% of retail securitisation issuances during the first half.