India’s Asset-Backed Securities Issuance Hits Record ₹1.53 Trillion as Foreign Banks Increase Purchases

India's Asset-Backed Securities (ABS) market recorded its highest annual issuance in FY25, with total transactions reaching ₹1.53 trillion, as per a Bloomberg report.  

The growth was accompanied by higher participation from foreign banks, which increased their share of purchases during the year. 

According to Crisil Ratings, overseas lenders accounted for around 35% of total issuance in the financial year ended March. Their share had remained between 28% and 30% in each of the previous 2 years.  

Based on the overall issuance volume, foreign banks purchased securities worth about $5.6 billion. 

Foreign Banks Increase Exposure 

Global lenders including Barclays, Citigroup, JPMorgan Chase and Standard Chartered were among those that increased investments in the segment, according to the reports. 

The transactions provide overseas banks with exposure to India's retail credit market through pools of existing loans. They also allow lenders to meet certain domestic priority-sector lending requirements through purchases rather than direct loan disbursements. 

Retail Lending Supports Market Growth 

Asset-backed securities are created by bundling loans and selling them to investors. The underlying assets typically include housing loans, vehicle loans, personal loans, and gold loans. 

In India, securitisation transactions are mainly structured as pass-through certificates and direct assignments. The market has expanded alongside growth in retail lending, which has increased the volume of loans available for securitisation. 

NBFCs Use Securitisation for Funding 

Non-banking financial companies have increasingly used securitisation to raise funds and diversify borrowing sources. Loan pools sold through these transactions generally have residual maturities ranging from one to 2.5 years. 

Crisil data showed coupon rates for AAA-, AA- and A-rated securities ranged between 7.3% and 11.5%. HDB Financial Services raised nearly 3% of its liabilities through pass-through certificates as of March-end, compared with none a year earlier. 

Aye Finance noted that securitised borrowings were 75 to 100 basis points cheaper than raising funds through the domestic bond market because the transactions received higher credit ratings than the company itself. 

Large Deals Add Momentum 

One of the largest securitisation transactions in India was completed in September 2025 when Reliance Group companies raised ₹210 billion through asset-backed securities. 

Although issuance has risen sharply, India's ABS market remains smaller than China's, where total issuance stood at 2.28 trillion yuan in 2025. 

Read More: World Bank Approves $1.5 Billion to Boost India's Employment and Business Sectors! 

Conclusion 

Higher foreign participation, rising retail credit and increased use of securitisation by non-bank lenders contributed to record asset-backed securities issuance in India during FY25. 

For daily market updates and regular stock market news in Hindi, stay tuned to Angel One's share market news in Hindi. 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.   
 
Investments in the securities market are subject to market risks, read all the related documents carefully before investing.