India’s financial landscape reached a new milestone with the listing of the nation’s first mortgage-backed Pass Through Certificates (PTCs) on the National Stock Exchange (NSE). This pioneering issue, structured by RMBS Development Company Limited and backed by a pool of housing loans from LIC Housing Finance Limited, is widely seen as a catalyst for deepening India’s securitisation and housing finance markets.
The ₹1,000 crore issue comprised 1,00,000 certificates, each with a face value of ₹1,00,000, and was fully subscribed, highlighting robust investor confidence in long-term, asset-backed securities. Notably, this is the first time in India that a PTC issue’s coupon rate was discovered through the NSE’s Electronic Book Provider (EBP) platform, with the final rate set at 7.26% per annum, payable monthly, and a maturity of nearly 20 years. The instruments have received a top-tier AAA(SO) rating from CRISIL and CARE Ratings, ensuring their strong credit quality and appeal to institutional investors.
The listing ceremony in Mumbai was led by Shri M. Nagaraju, Secretary of the Department of Financial Services, Ministry of Finance, who rang the ceremonial bell in the presence of senior officials from banks, housing finance companies, and key financial institutions. In his address, Nagaraju emphasised the vital role of the housing and housing finance sectors in India’s economic development, noting their extensive linkages with infrastructure and other industries.
Nagaraju also highlighted the potential of securitisation to integrate the housing finance and debt markets, describing the introduction of Residential Mortgage-Backed Securities (RMBS) as a possible catalyst for the sector’s future growth. The National Housing Bank, which recently set up a dedicated firm to facilitate the development of the RMBS market, expects the sector to raise between ₹100 billion and ₹200 billion through multiple transactions in the current fiscal year.
Industry experts believe this successful listing will pave the way for other housing finance companies to issue similar instruments, broadening access to long-term funding for affordable housing and increasing liquidity in the secondary market. The dematerialised, transferable nature of these PTCs further enhances their tradability and appeal to a wider range of institutional investors, including insurers and pension funds.
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The debut of mortgage-backed PTCs on the NSE marks a significant advancement in India’s financial sector, supporting the government’s affordable housing initiatives and strengthening the country’s debt capital markets for years to come.
