Mumbai, 6 May: India has achieved a significant milestone with the listing of its first-ever mortgage-backed Pass Through Certificates (PTCs) on the National Stock Exchange (NSE). The ceremonial bell was rung by M. Nagaraju, Secretary of the Department of Financial Services, Ministry of Finance, in Mumbai, marking a new chapter in the country’s housing finance landscape. These PTCs were structured by RMBS Development Company Limited and are backed by a pool of housing loans originated by LIC Housing Finance Limited.
The issue size of ₹1,000 crore was fully subscribed, reflecting strong investor confidence in this innovative financial instrument. A total of 100,000 certificates were issued, each with a face value of ₹1,00,000. Notably, this is the first time in India that the coupon rate for a PTC issue was discovered through the NSE’s Electronic Book Provider (EBP) platform, ensuring transparency and market-driven pricing. The certificates carry a 7.26% annual coupon and have a maturity period of approximately 20 years. Rated AAA(SO) by CRISIL and CARE Ratings, these PTCs are issued in dematerialized form, making them fully transferable and eligible for trading in the secondary market.
During the event, M. Nagaraju emphasized the critical role of the housing and housing finance sectors in driving India’s economic growth. He pointed out that housing finance has extensive forward and backward linkages with other sectors, including infrastructure, and stressed that addressing the housing needs of India’s large population is essential for inclusive and sustained economic development. He also highlighted the potential of securitization to integrate the housing finance and debt markets more closely. The introduction of Residential Mortgage-Backed Securities (RMBS) through this listing could act as a catalyst for future growth in the sector.
This landmark listing is expected to open new avenues for housing finance companies to raise capital through the debt markets, with projections suggesting that ₹10,000–12,000 crore could be mobilized through listed RMBS in the coming financial year. The establishment of RMBS Development Company Limited, promoted by the National Housing Bank, is a crucial step towards building investor confidence and providing liquidity support in the secondary market. Overall, this development not only strengthens the housing finance ecosystem but also broadens investment opportunities, setting the stage for a more vibrant and integrated debt market in India.
