Gold loans surpass vehicle loans to become largest securitised asset class in Q1FY27: CRISIL Ratings
CRISIL Ratings in its latest report has said that gold loans surpassed vehicle loans to become the largest securitised asset class in the April-June quarter of the current fiscal (Q1FY27), marking a significant shift in the overall asset class composition. It said securitisation, a process through which lenders pool loans and sell them to investors to raise funds and free up capital for fresh lending, saw issuances rising 22 per cent year-on-year to about Rs 60,000 crore in Q1FY27.
The report said over 98 per cent of quarterly issuances came from non-banking financial companies (NBFCs), unlike previous peak periods when banks had also contributed significantly. During Q1FY27, gold loans accounted for around 31 per cent of total securitisation volume, while the share of vehicle loans eased to about 26 per cent due to lower issuances from a major originator.
According to the report, the rise in gold loan securitisation, along with subdued activity by a large private bank that had driven sizeable retail mortgage-backed securitisation (MBS) volumes last fiscal, reduced the share of MBS to 12 per cent from 21 per cent a year ago. Business loan securitisation rose to 10 per cent from 7 per cent, driven by secured business loan pools, while microfinance loans rose to 14 per cent from 11 per cent, helped by better portfolio performance and demand for priority-sector assets.
The report further said changing asset mix also influenced the mode of securitisation, with direct assignment transactions accounting for around 54 per cent of the total volume, compared with 46 per cent for pass-through certificate (PTC) transactions. Nearly 87 per cent of securitised gold loans were executed through the direct assignment (DA) route during the quarter. It noted that banks, including public sector, private and foreign lenders, invested in around 90 per cent of the issuances during the quarter. Other investors included large NBFCs, alternative investment funds, mutual funds, insurance companies, high-net-worth individuals and family offices.
