Citigroup India to Triple Asset-Backed Securities Holdings Amid Securitisation Growth
Citigroup Inc.’s India unit is set to significantly expand its holdings of asset-backed securities, tripling its portfolio to over $1 billion by the end of the fiscal year. The move comes as Indian lenders seek liquidity amid sluggish deposit growth, with the country’s total securitisation volume expected to reach nearly $30 billion by March 2026, according to Aditya Bagree, managing director and head of markets at Citi India. The securitisation market, though still in its early stages, is rapidly expanding as private banks increasingly participate due to regulatory pressures and efforts to improve credit deposit ratios.
The market for securitised assets in India has seen significant growth, with volumes rising over 80% to ₹68,000 crore ($7.81 billion) in the third quarter compared to the previous year, as per ICRA Ratings. Traditionally dominated by non-banking financial companies and housing finance firms, the sector is now witnessing participation from major private lenders like HDFC Bank, IDFC First Bank, and digital lenders such as Navi Finserve. Citi India prefers asset-backed securities over direct assignments, expecting them to account for nearly 60% of the country’s total securitisation deals this year.
Bagree highlighted that vehicle loans remain the largest asset class in securitisation, while personal and small business loans are increasingly entering the market. He noted that institutional buyers such as local asset management companies and select lenders are driving demand, but long-term players like insurance and pension funds will be crucial for mortgages to gain traction in the securitisation space. With more transactions and improved liquidity, alternative investment funds are also expected to emerge as key players in the coming years.
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