India’s first Mortgage backed Pass Through Certificates

India’s first Mortgage backed Pass Through Certificates (PTC) were listed on the National stock Exchange on 05 May 2025. It was structured by RMBS Development Company Limited .

• This is the first issue of a PTC where the coupon was discovered on the “Electronic Book Provider (EBP)“ platform of the National Stock Exchange. The final maturity of the PTC issued will be nearly twenty years and the coupon is 7.26% per annum.

Key Highlights of the Listing:

• Issuer: RMBS Development Company Limited
• Platform: Listed on NSE; coupon discovered via Electronic Book Provider (EBP) platform
• Tenor: ~20 years (long-term maturity uncommon in Indian debt markets)
• Coupon: 7.26% per annum — market-discovered

What Are Mortgage-Backed PTCs?

Pass Through Certificates (PTCs) are debt instruments backed by a pool of loans (in this case, mortgages). Investors receive a share of interest and principal payments from the underlying mortgage pool.

Securitisation Process:

1. Loan originators (e.g., housing finance companies) pool loans (like home loans).
2. These loans are sold to a Special Purpose Vehicle (SPV) or Trust.
3. The SPV issues PTCs to investors.
4. Cash flows from borrowers (EMIs) are passed through to PTC investors after deducting servicing fees.

Regulatory Framework:

• Governed under RBI’s securitisation guidelines and/or SEBI’s Securitisation Regulations.
• Recent regulations emphasize:
  • Transparency
  • Risk-based pricing
  • Robust credit rating mechanisms
  • Bankruptcy remoteness (SPV insulation from the originator)