Shiksha Finance Completes First Securitisation Transaction with DMI Housing Finance, Raises Over INR 200 Million Through PTC Route

Shiksha Finance has completed its first securitisation transaction with DMI Housing Finance, raising INR 43.4 million through Pass-Through Certificates backed by mortgage loans. The deal takes the company's cumulative securitisation fundraising beyond INR 200 million and strengthens its funding strategy for expanding secured lending to underserved MSMEs and informal sector workers.

Chennai-based Shiksha Financial Services India Private Limited (Shiksha Finance) has successfully concluded a securitisation transaction with DMI Housing Finance Private Limited, a National Housing Bank-registered housing finance company focused on expanding access to affordable housing finance for lower-income and economically weaker sections. The transaction marks Shiksha Finance's first debt fundraising from a housing finance company and represents another milestone in the company's growing securitisation programme.

DMI Housing Finance, which operates across nine states through a network of 67 operational branches, participated in the transaction as the investor. The securitisation involved the issuance of Pass-Through Certificates (PTCs) by "Micro-LAP Empower June 2026," a Special Purpose Vehicle trust established exclusively for the transaction. Series A1 PTCs worth INR 43.4 million were fully subscribed by DMI Housing Finance. The certificates are backed by a pool of mortgage-backed loan receivables originating from 148 loan contracts created by Shiksha Finance.

The Series A1 PTCs have received a provisional rating of ICRA A- (SO). The transaction structure includes multiple layers of credit enhancement comprising cash collateral equivalent to 11.00 percent of the initial pool principal provided by Shiksha Finance, subordination of 10.00 percent of the initial pool principal for the Series A1 PTCs, and an Excess Interest Spread of 41.80 percent of the initial pool principal for the Series A1 PTCs.

This transaction is the third Pass-Through Certificate transaction completed by Shiksha Finance. With the latest fundraising, the company has cumulatively raised more than INR 200 million through the securitisation route. The Pass-Through Certificates issued under the previous two transactions have retained their A- (SO) rating from ICRA following the annual review, reflecting the continued performance of the underlying assets.

Commenting on the development, V L Ramakrishnan, Chief Executive Officer of Shiksha Finance, said that the partnership with DMI Housing Finance is a significant achievement because it introduces both a new investor and a new category of investors to the company's growing network of stakeholders. He added that Pass-Through Certificates and direct assignment transactions are expected to become important channels for future debt fundraising and treasury management.

Shiksha Finance provides secured mortgage-backed loans to micro, small and medium enterprises as well as informal sector workers. As of June 2026, the company operates across the southern states of Tamil Nadu and Andhra Pradesh through 19 branches and manages an outstanding micro Loan Against Property portfolio of INR 742.1 million. The company believes that its micro Loan Against Property product enables micro, small and medium enterprises to access formal finance by unlocking the value of their residential properties. Since introducing the product, Shiksha Finance has financed nearly 2,500 underbanked entrepreneurs and informal sector workers. By extending secured micro Loan Against Property loans to eligible borrowers, the company aims to help customers increase their income, strengthen business cash flows, and improve their long-term credit profiles.

The successful completion of the transaction strengthens Shiksha Finance's access to diversified sources of institutional funding while reinforcing investor confidence in its mortgage-backed lending portfolio. It also highlights the growing role of securitisation in supporting financial institutions that focus on expanding credit access for underserved entrepreneurs and informal sector borrowers.