Major Milestone in Housing Finance: India’s First Mortgage-Backed PTCs Listed on NSE

The ceremonial bell-ringing at the NSE by Shri Nagaraju heralded the entry of mortgage-backed PTCs into the formal trading ecosystem.

In a landmark event for India’s financial and housing sectors, Shri M. Nagaraju, Secretary of the Department of Financial Services under the Ministry of Finance, officiated the listing of the country’s first Mortgage-Backed Pass Through Certificates (PTCs) on the National Stock Exchange (NSE) on May 5, 2025. This milestone marks a significant step in the deepening of India’s securitization market, particularly in the housing finance domain.

Bell-Ringing Ceremony Marks a Historic Beginning

The ceremonial bell-ringing at the NSE by Shri Nagaraju heralded the entry of mortgage-backed PTCs into the formal trading ecosystem. The event was attended by a distinguished gathering, including senior representatives from leading banks, housing finance companies (HFCs), and other financial institutions, signaling broad institutional support for this innovative financial instrument.

Structured by RMBS Development Company Limited, this issuance marks the first instance in India where mortgage-backed securities have been listed for public trading. It reflects a matured shift in the Indian financial market toward diversified, investor-accessible debt products.

Details of the Issuance

The issued PTCs are backed by a carefully curated pool of housing loans originated by LIC Housing Finance Limited, one of the country’s largest housing finance companies. The issue size was Rs. 1,000 crores, consisting of 1,00,000 certificates with a face value of Rs. 1,00,000 each. The offering was fully subscribed, reflecting strong investor confidence in the product as well as the underlying housing loan pool.

These PTCs were the first of their kind where the coupon rate was discovered through the “Electronic Book Provider (EBP)” platform of the National Stock Exchange. This transparent price discovery process resulted in a final coupon rate of 7.26% per annum, with a final maturity period of approximately twenty years.

Highest Credit Ratings, Tradeable and Transparent

The securities received a AAA(SO) rating from both CRISIL and CARE Ratings, indicating the highest level of safety in terms of timely servicing of financial obligations. Issued in dematerialized (demat) form, these PTCs are freely transferable and can now be traded in the secondary market, making them a highly liquid investment option for institutions and high-net-worth individuals.

A Vision for Economic Growth Through Housing

Speaking on the occasion, Shri Nagaraju emphasized the vital role of the housing and housing finance sectors in propelling India’s economic development. He highlighted how housing has extensive forward and backward linkages with other industries such as cement, steel, infrastructure, and consumer goods—thereby acting as a force multiplier for employment and growth.

With India’s large and growing population, the need for accessible and affordable housing finance becomes crucial. Shri Nagaraju underscored that innovative financing tools such as securitized mortgage-backed securities can be pivotal in bridging the housing deficit and mobilizing institutional funds toward homeownership for all segments of society.

Securitization as a Game-Changer

Reiterating the importance of Residential Mortgage-Backed Securities (RMBS), he stated that these instruments could act as integrating bridges between the housing finance sector and broader debt capital markets. By enabling better risk distribution and liquidity management, securitization could incentivize lenders to expand housing credit to underserved regions and segments, thus supporting inclusive growth.

The listing of mortgage-backed PTCs on the NSE is also expected to improve price transparency, secondary market depth, and investor participation, particularly from long-term investors such as pension funds, mutual funds, and insurance companies.

Industry-Wide Implications

This development could catalyze the evolution of a vibrant RMBS ecosystem in India. With robust regulatory frameworks, digital loan origination and servicing platforms, and growing investor appetite, India is now well-positioned to replicate the success seen in more mature financial markets.

The successful listing of these instruments also aligns with the Government of India’s vision of making financial markets more inclusive, transparent, and innovation-driven.