Sanjay Shukla, National Housing Bank (NHB) Managing Director (MD) attends the listing ceremony of India’s first Residential Mortgage-Backed Security (RMBS) structured by RMBS Development Company Limited (RDCL) at the National Stock Exchange (NSE) in Mumbai, India, May 5, 2025.
| Photo Credit:
FRANCIS MASCARENHAS
The RMBS Development Company Limited (RDCL) will structure 7-10 more Residential Mortgage-Backed Securitisation (RMBS) transactions aggregating about ₹10,000 crore to ₹12,000 crore in the current financial year, according to Sanjay Shukla, Managing Director, National Housing Bank.
The National Housing Bank (NHB) is the promoter of RDCL, which has a paid-up capital of ₹500 crore and is classified as a middle-layer non-banking finance company by the RBI, with 39 per cent stake.
The Life Insurance Corporation of India has 10 per cent stake and HDFC Bank, ICICI Bank and Bajaj Finance have 7 per cent stake each in the company. Six housing finance companies have 5 per cent stake each.
Speaking at the sidelines of the listing ceremony of the PTCs (pass-through-certificates) underlying the first RMBS transaction, comprising LIC Housing Finance’s housing loan pool aggregating ₹1112.05 crore, Shukla said the coupon rate on the PTCs, which mature in February 2025, is 7.26 per cent, payable monthly. The door-to-door maturity of the PTCs, which have been listed on NSE, is about 20 years.
Down the line, RDCL, which structured this RMBS transaction, will consider allowing retail investors to invest in the PTCs, he added.
Out of the ₹1112.05 crore housing loan pool which has been securitised, PTCs aggregating ₹1,000 crore have been issued to investors. The balance ₹112.05 crore will be held by the loan originator as equity tranche (minimum retention requirement).
Loan originators
An RMBS transaction unlocks liquidity for loan originators, allowing them to originate fresh loans. It is an alternative avenue for lenders to raise funds. It can bring down their cost of funds, which could be passed on to the home loan borrowers.
Shukla noted that the outstanding housing loans are at about ₹33 lakh crore. Even if 10 per cent of these loans are securitised, it will lead to unlocking of funds for further origination of home loans by lenders.
To make shareholding more widespread, more Banks and HFCs are likely to invest in RDCL’s capital. However, at any given point of time, NHB’s stake in the company will be at least 26 per cent.
Shukla said NHB is planning to raise about ₹55,000 crore to ₹60,000 crore via bonds in the current financial year against Rs 48,000 crore in FY25 for its refinance operations and redeeming maturing bonds.
Published on May 5, 2025
