Mumbai, Oct 14 (NationPress) India's total securitisation issuance has surged to a remarkable Rs 2.35 trillion (around $27 billion) in the fiscal year 2025, as reported, with approximately 22 percent designated for residential mortgage-backed securities (RMBS). The majority of RMBS issuance has been facilitated through bilateral assignments, as indicated by data from S&P Global Ratings.

Interestingly, pass-through certificate structures constitute a much smaller segment of the RMBS landscape when compared to their overall presence in India's securitisation sector.

The report notes, "The inaugural RMBS transaction introduced by RMBS Development Co. Ltd. (RDCL) has the potential to enhance investor confidence and could lead to more issuances based on pass-through certificates (as opposed to bilateral assignments), aligning with conventional structures seen in international securitisation markets."

Furthermore, it highlighted that India is poised to attract a greater number of both domestic and foreign investors into its mortgage securitisation arena, particularly as it has become one of the fastest-growing economies globally.

With its advantageous demographics, swift urbanisation, and robust policy backing, India is well-equipped to address its increasing housing requirements.

"This has significantly driven the growth of the housing market. New residential mortgage origination volumes surged by approximately 40 percent from fiscal years 2020 to 2025 (ending March 31)," the report stated.

Simultaneously, the interest of issuers in diversifying their funding sources, along with efforts to cultivate offshore investor interest and regulatory support for foreign portfolio investments, is propelling the greater use of securitisation for financing purposes.

The listing of the transaction on the National Stock Exchange (NSE), along with publicly accessible offering circulars and investor reports, contributes to enhanced market transparency.

According to the global rating agency, "We believe that a transparent framework and the standardisation of documents in accordance with global benchmarks can help broaden the investor base to include a healthy mix of domestic and offshore investors, aiding in price discovery."

From a rating perspective, the agency remarked that certain features would necessitate a more in-depth evaluation alongside other transaction characteristics.

The report also drew comparisons between institutions similar to RDCL globally and the typical transaction features of the mortgage-backed securities they issue.

"We delve into our considerations for rating RMBS transactions in India," the report concluded.