RMBS Market Set to Boom: Housing Lenders Plan Big FY26 Raise

Home finance companies in India are likely to raise between ₹10,000 crore and ₹12,000 crore in FY26 through listed Residential Mortgage-Backed Securities (RMBS). The transactions will be facilitated by RMBS Development Company Ltd (RDCL), an NHB-backed entity modeled after global players like Freddie Mac and Fannie Mae. This development was shared by Sanjay Shukla, MD of the National Housing Bank, during an industry event on Monday.

LIC Housing’s ₹1,000 Cr Deal Sets Precedent

Shukla highlighted that RDCL recently helped structure India’s first listed RMBS deal, with LIC Housing Finance raising ₹1,000 crore through pass-through certificates (PTCs). The debt instruments, with a 20-year tenure and 7.26% coupon, were backed by LIC’s housing loan portfolio and listed via the National Stock Exchange’s electronic bidding platform—a move seen as a landmark in India’s mortgage finance ecosystem.

Why This Structure Stands Out

Unlike traditional portfolio sales to banks—where rates are pre-decided—this new method enables price discovery through open bidding. Shukla emphasized that this introduces transparency and competitive pricing, potentially leading to reduced borrowing costs for housing finance firms.

Wider Benefits for Homebuyers

M. Nagaraju, Secretary at the Department of Financial Services, mentioned that such transparent fundraising could lead to lower interest rates for end consumers and promote availability of long-term fixed-rate home loans, thereby supporting the government's affordable housing goals.

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