Global Banks Drive India Asset-Backed Securities Sales to Record

India’s asset-backed securities (ABS) market reached a record high in the first quarter of 2024, driven by significant purchases from global banks seeking exposure to the country's robust economic growth. This surge saw the issuance of ABS climb to approximately $1.7 billion, a substantial increase from the $1.1 billion recorded in the same period last year. Major global financial institutions, including Standard Chartered and Barclays, were among the key buyers, attracted by the higher yields offered compared to developed markets. The ABS market in India primarily comprises securitized auto loans, personal loans, and microfinance loans, with auto loans forming the largest segment at around 50% of the total market. This increased demand from foreign investors has provided much-needed liquidity to Indian lenders, enabling them to expand their loan books and support domestic consumption and investment. The Reserve Bank of India's supportive regulatory framework, which has facilitated easier securitization processes, has also contributed to the market's expansion. Analysts predict continued growth in the Indian ABS market, forecasting issuances to potentially reach $20 billion by the end of 2024, further solidifying its position as a key destination for global capital.