NBFC (Non-Banking Financial Company) stocks refer to shares of companies that provide financial services like loans, asset management and investment without holding a banking license. These firms offer services such as personal loans, mortgages and microfinance, playing a significant role in India’s financial ecosystem and economic growth.
The table below shows the NBFC stocks in India based on the highest market capitalisation and 1-year return.
| Stock Name | Close Price (₹) | Market Cap (₹ Cr) | 1Y Return (%) |
| Bajaj Finance Ltd | 519990.67 | 8,396.70 | 25.53 |
| Indian Railway Finance Corp Ltd | 163500.08 | 125.11 | -18.87 |
| Jio Financial Services Ltd | 148453.86 | 233.67 | -19.45 |
| Power Finance Corporation Ltd | 128604.97 | 389.7 | -5.5 |
| Cholamandalam Investment and Finance Company Ltd | 116391.07 | 1,384.15 | 27.51 |
| Shriram Finance Ltd | 110021.26 | 585.1 | 24.17 |
| REC Limited | 106263.75 | 403.55 | -11.11 |
| Bajaj Housing Finance Ltd | 94,557.78 | 113.54 | -31.19 |
| Muthoot Finance Ltd | 88,807.83 | 2,212.10 | 67.05 |
| Rail Vikas Nigam Ltd | 77,500.20 | 371.7 | 42.77 |
Table of Contents
Introduction to Top NBFC Stocks In India
Bajaj Finance Ltd
The Market Cap of Bajaj Finance Ltd is ₹519,990.67 crores. The stock’s monthly return is 12.35%, and its one-year return is 25.53%. The stock is 3.17% away from its 52-week high.
Bajaj Finance Ltd, part of the Bajaj Finserv Group, is a leading player in the Indian financial services sector, providing an array of services such as consumer finance, SME loans, and commercial lending. With a strong focus on technology-driven solutions, it has become a significant player in the country’s lending landscape. Despite macroeconomic challenges, Bajaj Finance continues to demonstrate strong growth in its loan book and customer base, driven by its diverse portfolio of products and services.
The company has shown resilience in the face of a tough economic environment, with its market-leading position allowing it to capitalize on India’s growing financial inclusion. Bajaj Finance’s robust risk management framework, backed by a seasoned leadership team, positions it well to navigate through challenges and deliver consistent growth. However, the stock’s volatility and the competitive nature of the financial services sector remain factors to watch for investors.
Indian Railway Finance Corp Ltd
The Market Cap of Indian Railway Finance Corp Ltd is ₹163,500.08 crores. The stock’s monthly return is -14.83%, and its one-year return is -18.87%. The stock is 83.04% away from its 52-week high.
Indian Railway Finance Corporation (IRFC) is a specialized public sector undertaking that plays a key role in funding the infrastructure requirements of the Indian Railways. As the financial arm of Indian Railways, IRFC issues bonds and other debt instruments to raise capital for investments in rail infrastructure. The company primarily finances the procurement of rolling stock and other infrastructure projects for Indian Railways.
Despite its pivotal role in the railway sector, IRFC’s stock has faced challenges in recent years, reflected by a dip in its one-year return. However, the long-term growth prospects remain strong, driven by the government’s commitment to modernizing the railway network and expanding its capacity. Investors looking for stable income streams from a government-backed entity may find IRFC attractive, though the stock’s recent performance suggests caution in the short term.
Jio Financial Services Ltd
The Market Cap of Jio Financial Services Ltd is ₹148,453.86 crores. The stock’s monthly return is -14.57%, and its one-year return is -19.45%. The stock is 68.91% away from its 52-week high.
Jio Financial Services Ltd, part of the Jio Group, is a relatively new entrant into the Indian financial services sector. The company aims to leverage the vast customer base of Jio’s telecom business to offer a range of financial products, including lending, insurance, and asset management. Its strong technological infrastructure and access to data analytics make it well-positioned to disrupt the traditional financial services industry in India.
Despite a challenging market environment, Jio Financial Services has shown promise with its innovative approach and deep integration with the Jio ecosystem. The stock has demonstrated resilience with a positive one-year return, reflecting investor confidence in its long-term potential. However, given its early-stage status, investors must consider the volatility and competition in the financial services space before making investment decisions.
Power Finance Corporation Ltd
The Market Cap of Power Finance Corporation Ltd is ₹128,604.97 crores. The stock’s monthly return is -9.96%, and its one-year return is -5.5%. The stock is 48.83% away from its 52-week high.
Power Finance Corporation (PFC) is a leading public sector financial institution in India, primarily focused on providing financing for the power sector. The company extends loans to power generation, transmission, and distribution companies, playing a crucial role in the development of India’s energy infrastructure. PFC’s strong relationship with the government and its focus on renewable energy projects position it well to benefit from India’s growing energy demands.
While PFC has demonstrated stability in terms of its revenue and loan book growth, its stock has faced pressure recently, reflected in the negative monthly return. However, the government’s focus on power sector reforms and renewable energy transition provides a favorable backdrop for PFC’s growth. Investors looking for stable, long-term returns with exposure to India’s power sector infrastructure may find PFC an attractive option, although short-term market fluctuations remain a risk.
Cholamandalam Investment and Finance Co
The Market Cap of Cholamandalam Investment and Finance Company Ltd is ₹116,391.07 crores. The stock’s monthly return is 11.42%, and its one-year return is 27.51%. The stock is 19.35% away from its 52-week high.
Cholamandalam Investment and Finance Company Ltd is a well-established player in the Indian financial services sector, providing a range of products including vehicle finance, home loans, and loan against property. It operates primarily in the retail finance segment, offering customized solutions to meet the diverse needs of individuals and small businesses. The company is part of the Murugappa Group, a renowned business conglomerate in India.
With its focus on strong asset quality, robust risk management practices, and the backing of the Murugappa Group, Cholamandalam is well-positioned to continue expanding its customer base. However, despite its growth potential, the stock’s performance has been moderate over the past year, and it remains significantly below its 52-week high. Investors may look at Cholamandalam as a stable, long-term investment option, especially for those interested in the Indian retail finance market.
Shriram Finance Ltd
The Market Cap of Shriram Finance Ltd is ₹110,021.26 crores. The stock’s monthly return is 12.27%, and its one-year return is 24.17%. The stock is 24.84% away from its 52-week high.
Shriram Finance Ltd is a prominent non-banking financial company (NBFC) in India, offering a range of financial products including loans for vehicles, home finance, and microfinance. It caters primarily to retail customers and small businesses, focusing on providing financing solutions to underserved sectors of the economy. Shriram Finance has established a strong network of branches across India, allowing it to reach a wide customer base.
Despite facing some recent volatility, Shriram Finance has demonstrated strong performance in the past year, with a positive return. The company’s deep penetration into India’s rural and semi-urban markets, along with its diversified portfolio, makes it a reliable player in the NBFC space. However, investors should consider the potential risks associated with macroeconomic conditions and the regulatory environment when evaluating the stock’s future prospects.
REC Limited
The Market Cap of REC Limited is ₹106,263.75 crores. The stock’s monthly return is -16.52%, and its one-year return is -11.11%. The stock is 62.06% away from its 52-week high.
REC Limited is a public sector financial company in India that specializes in providing financing for the power sector. The company primarily finances projects related to power generation, transmission, and distribution, including renewable energy. REC is owned by the Government of India, which ensures its stability and provides a solid growth outlook as the Indian power sector expands and modernizes.
Despite recent volatility in the stock, REC’s underlying business remains strong, and it has shown consistent profitability in recent years. The company’s strong linkage to India’s energy sector and its role in financing large-scale infrastructure projects make it a key player in the sector. As the government continues its focus on energy reforms and infrastructure development, REC is likely to benefit in the long run, although short-term stock performance has been impacted by broader market trends.
Bajaj Housing Finance Ltd
The Market Cap of Bajaj Housing Finance Ltd is ₹94,557.78 crores. The stock’s monthly return is -0.9%, and its one-year return is -31.19%. The stock is 66.02% away from its 52-week high.
Bajaj Housing Finance Ltd, a subsidiary of Bajaj Finance, is one of the leading housing finance companies in India, offering home loans, loan against property, and other related services. The company caters to a wide range of customers, from salaried individuals to self-employed professionals, with a focus on offering affordable and accessible home financing solutions.
While Bajaj Housing Finance has maintained a solid presence in the housing finance market, the stock has faced significant pressure over the past year, with a marked decline in its one-year return. However, the company’s strong backing from Bajaj Finance and its ability to leverage the group’s extensive distribution network provide a solid foundation for long-term growth. Investors need to monitor its short-term volatility, but its long-term prospects remain strong, especially in the growing housing market.
Muthoot Finance Ltd
The Market Cap of Muthoot Finance Ltd is ₹88,807.83 crores. The stock’s monthly return is 6.22%, and its one-year return is 67.05%. The stock is 5.55% away from its 52-week high.
Muthoot Finance Ltd is a leading gold loan provider in India, catering to individuals who need quick access to credit. It operates a vast network of branches across the country, making it accessible to a wide customer base.
The company’s strong financial position and expertise in gold-backed lending have helped it maintain impressive growth. With a focus on customer service and a broad market reach, Muthoot Finance is positioned to continue benefiting from India’s growing need for personal loans.
Rail Vikas Nigam Ltd
The Market Cap of Rail Vikas Nigam Ltd is ₹77,500.20 crores. The stock’s monthly return is -11.75%, and its one-year return is 42.77%. The stock is 74.07% away from its 52-week high.
Rail Vikas Nigam Ltd (RVNL) is a public sector undertaking that plays a key role in the development of the Indian railway infrastructure. The company is primarily engaged in the construction and modernization of railway tracks, stations, bridges, and other related infrastructure. RVNL is also involved in the implementation of various railway projects under the government’s Railway Modernization Programme.
Despite the recent market fluctuations, RVNL has been a strong performer, with an impressive one-year return of 41.30%. The company is well-positioned to benefit from India’s ongoing focus on infrastructure development and railway modernization. Its substantial order book and growing role in the railway sector make it an attractive investment opportunity for those looking for exposure to the Indian infrastructure and transport sectors.
What Is NBFC Stocks?
NBFC stocks refer to shares of non-banking financial companies, which are financial institutions that offer various services, including loans, asset management, and investment products, without holding a banking license. These companies play a crucial role in India’s financial system by providing credit and facilitating financial inclusion.
Investing in NBFC stocks can be a lucrative opportunity, as these firms often target underserved markets. Investors are drawn to the potential for higher returns compared to traditional banks, though they also face unique risks such as regulatory changes and market fluctuations. Understanding the performance and stability of these companies is essential before making investment decisions.
Features Of NBFC Stocks
The key features of NBFC stocks include their role in providing financial services like loans, asset management and insurance, often filling gaps left by traditional banks. NBFCs are essential in reaching underserved segments and driving economic growth.
- Diversified Loan Portfolio: NBFCs typically offer a wide range of financial products, including personal loans, vehicle loans and microfinance. This diversified portfolio allows them to tap into various segments, providing consistent revenue across different economic cycles.
- Higher Interest Margins: Unlike banks, NBFCs have the flexibility to charge higher interest rates on loans. This leads to higher net interest margins, which can boost profitability and make NBFC stocks appealing to investors seeking high returns.
- Regulatory Environment: NBFCs are subject to regulations from the Reserve Bank of India (RBI), but they operate with less stringent capital requirements compared to banks. This allows them to scale operations faster, though changes in regulations can impact their performance.
- Access to Underserved Markets: NBFCs play a crucial role in providing credit to individuals and small businesses that may not qualify for loans from traditional banks. This access to underserved markets creates growth opportunities, enhancing stock value.
- Interest Rate Sensitivity: NBFC stocks are highly sensitive to changes in interest rates. A rise in interest rates can increase borrowing costs for NBFCs, impacting profitability, while lower rates often boost loan demand, positively influencing stock performance.
NBFC Stocks Based on 6-Month Return
The table below shows the NBFC stocks based on a 6-month return.
| Stock Name | Close Price (₹) | 6M Return (%) |
| Bajaj Finance Ltd | 8,396.70 | 24.67 |
| Muthoot Finance Ltd | 2,212.10 | 15.48 |
| Pacheli Industrial Finance Ltd | 19.67 | 3.15 |
| Cholamandalam Investment and Finance Company Ltd | 1,384.15 | -1.16 |
| Authum Investment & Infrastructure Ltd | 1,528.90 | -4.44 |
| Shriram Finance Ltd | 585.1 | -7.39 |
| Systematix Corporate Services Ltd | 121.7 | -7.66 |
| SG Finserve Ltd | 342.85 | -11.64 |
| Mahindra and Mahindra Financial Services Ltd | 270.45 | -12.12 |
| Saraswati Commercial (India) Ltd | 10,882.00 | -12.72 |
Best NBFC Stocks In India Based on 5-Year Net Profit Margin
The table below shows the best NBFC stocks in India based on 5-year net profit margin.
| Stock Name | Close Price (₹) | 5Y Avg Net Profit Margin (%) |
| Sundaram Finance Holdings Ltd | 262.55 | 162.36 |
| Vardhman Holdings Ltd | 3,189.40 | 95.34 |
| Muthoot Finance Ltd | 2,212.10 | 31.34 |
| Indian Railway Finance Corp Ltd | 125.11 | 26.36 |
| REC Limited | 403.55 | 24.72 |
| Bajaj Finance Ltd | 8,396.70 | 22.56 |
| Bajaj Housing Finance Ltd | 113.54 | 18.81 |
| Power Finance Corporation Ltd | 389.7 | 17.64 |
| Cholamandalam Investment and Finance Company Ltd | 1,384.15 | 17.37 |
| Shriram Finance Ltd | 585.1 | 16.71 |
Best NBFC Stocks Based on 1M Return
The table below shows the best NBFC stocks based on a 1m return.
| Stock Name | Close Price (₹) | 1M Return (%) |
| Bajaj Finance Ltd | 8,396.70 | 12.35 |
| Shriram Finance Ltd | 585.1 | 12.27 |
| Cholamandalam Investment and Finance Company Ltd | 1,384.15 | 11.42 |
| Muthoot Finance Ltd | 2,212.10 | 6.22 |
| Mahindra and Mahindra Financial Services Ltd | 270.45 | 4.61 |
| Bajaj Housing Finance Ltd | 113.54 | -0.9 |
| Sundaram Finance Holdings Ltd | 262.55 | -9.69 |
| Power Finance Corporation Ltd | 389.7 | -9.96 |
| Rail Vikas Nigam Ltd | 371.7 | -11.75 |
| Master Trust Ltd | 134.02 | -12.71 |
High Dividend Yield NBFC Sector Stocks
The table below shows the high dividend yield NBFC sector stocks.
| Stock Name | Close Price (₹) | Dividend Yield (%) |
| REC Limited | 403.55 | 3.96 |
| Power Finance Corporation Ltd | 389.7 | 3.46 |
| Sundaram Finance Holdings Ltd | 262.55 | 2.95 |
| Mahindra and Mahindra Financial Services Ltd | 270.45 | 2.33 |
| Shriram Finance Ltd | 585.1 | 1.54 |
| Indian Railway Finance Corp Ltd | 125.11 | 1.2 |
| Muthoot Finance Ltd | 2,212.10 | 1.08 |
| Rail Vikas Nigam Ltd | 371.7 | 0.57 |
| Bajaj Finance Ltd | 8,396.70 | 0.43 |
| Vardhman Holdings Ltd | 3,189.40 | 0.16 |
Historical Performance of NBFC Stocks India
The table below shows the historical performance of NBFC stocks in India.
| Stock Name | Close Price (₹) | 5Y CAGR (%) |
| Authum Investment & Infrastructure Ltd | 1,528.90 | 185.22 |
| SG Finserve Ltd | 342.85 | 161.57 |
| Saraswati Commercial (India) Ltd | 10,882.00 | 157.46 |
| Master Trust Ltd | 134.02 | 110.54 |
| Systematix Corporate Services Ltd | 121.7 | 98.34 |
| Mufin Green Finance Ltd | 72.27 | 92.28 |
| Rail Vikas Nigam Ltd | 371.7 | 73.56 |
| Pacheli Industrial Finance Ltd | 19.67 | 40.37 |
| Sundaram Finance Holdings Ltd | 262.55 | 36.53 |
| Cholamandalam Investment and Finance Company Ltd | 1,384.15 | 33.05 |
Factors To Consider When Investing In NBFC Stocks
The factor to consider when investing in NBFC stocks is the company’s asset quality. Strong asset management and low non-performing assets (NPAs) are crucial for maintaining profitability and growth, especially in a competitive and regulated financial environment.
- Capital Adequacy and Leverage: Investors should evaluate an NBFC’s capital adequacy ratio and leverage. A well-capitalized company with controlled debt levels can manage risks better, ensuring financial stability and providing a solid foundation for future growth.
- Loan Portfolio Diversification: A diversified loan portfolio reduces risk. NBFCs that cater to various sectors, including retail, SME, and housing finance, are more resilient to market changes and economic downturns, improving the overall stability of their stock performance.
- Interest Rate Fluctuations: NBFCs are highly sensitive to interest rate changes. Investors should consider the impact of rising or falling interest rates on borrowing costs and loan demand, as these can significantly affect profitability and stock value.
- Regulatory Compliance: NBFCs are subject to RBI regulations, which can impact their operations. Changes in regulatory frameworks, such as tighter lending rules or increased capital requirements, can affect profitability, making regulatory risk an important consideration for investors.
- Credit Risk Management: Strong credit risk management is essential for NBFCs to minimize non-performing assets (NPAs). Investors should focus on companies with effective risk management practices, as high NPAs can erode profits and weaken stock performance over time.
How To Invest In Best NBFC Stocks?
Investing in top NBFC stocks requires careful analysis and research. Start by studying the financial health, management quality and market position of various companies. Look for promising growth potential and a strong asset base.
Additionally, keep an eye on interest rate trends and regulatory changes that may impact the NBFC sector. For a seamless investment experience, consider utilizing platforms like Alice Blue, which offers user-friendly services for stock trading.
Impact of Government Policies on NBFC Sector Stocks
Government policies have a significant impact on NBFC sector stocks. Supportive measures like liquidity infusions or credit enhancement programs help NBFCs manage their cash flows and maintain lending capacity, positively affecting stock performance.
On the other hand, stricter regulations such as increased capital requirements or tighter lending norms can raise operational costs and reduce profitability for NBFCs, leading to weaker stock performance.
Moreover, policies like interest rate adjustments or financial inclusion initiatives can also affect demand for NBFC services, influencing the sector’s growth prospects and directly impacting the performance of NBFC stocks.
How NBFC Stocks In India Perform in Economic Downturns?
Non-Banking Financial Companies (NBFCs) often face significant challenges in times of economic strain, as increased defaults and lower credit demand can impact their profitability. Investors typically react by reassessing the risks associated with these stocks, leading to volatility in their market performance.
However, some NBFCs may adapt better than others, employing strategic measures to strengthen their portfolios. By focusing on robust asset quality and diversifying their funding sources, certain NBFCs can weather economic downturns more effectively, presenting opportunities for savvy investors.
Advantages Of Investing In NBFC Stocks?
The primary advantage of investing in NBFC stocks is their ability to offer financial services to underserved segments. NBFCs cater to a wide range of customers and industries, driving growth potential and filling gaps left by traditional banks.
- Higher Profit Margins: NBFCs often have the flexibility to charge higher interest rates than banks. This leads to higher net interest margins and profitability, making NBFC stocks attractive for investors seeking higher returns.
- Diverse Loan Offerings: NBFCs provide a wide variety of financial products, including personal loans, housing loans and SME financing. This diversified loan portfolio helps reduce risk and provides stability, even during economic downturns.
- Fast-Growing Market: NBFCs are growing rapidly in India, particularly in sectors like microfinance and small business lending. Their ability to reach underserved markets and penetrate rural areas creates significant growth potential for investors.
- Lower Regulatory Constraints: Compared to traditional banks, NBFCs face fewer regulatory constraints, allowing them to operate more flexibly. This enables faster growth and adaptability to market changes, which can result in better stock performance over time.
- Access to Niche Markets: NBFCs often specialize in niche markets, such as microfinance or vehicle loans, which banks may not serve adequately. This focus on underserved sectors provides steady demand and enhances revenue growth, boosting their stock value.
Risks Of Investing In NBFC Stocks?
The main risk of investing in NBFC stocks is their vulnerability to economic downturns. As NBFCs rely heavily on lending, any slowdown in the economy can lead to increased defaults, affecting their profitability and stock performance.
- High Credit Risk: NBFCs often lend to high-risk borrowers, including individuals and small businesses with limited credit histories. This increases the likelihood of non-performing assets (NPAs), which can significantly erode profitability and impact stock prices.
- Interest Rate Sensitivity: NBFCs are sensitive to changes in interest rates. Rising rates can increase borrowing costs and reduce loan demand, affecting the company’s margins and stock value. Conversely, falling rates may boost growth but compress margins.
- Regulatory Changes: NBFCs are subject to evolving regulations from the Reserve Bank of India (RBI). Stricter rules on capital adequacy or lending practices can increase operational costs, reduce profitability, and negatively affect stock performance.
- Liquidity Issues: NBFCs often face liquidity challenges, particularly in times of market stress. If an NBFC struggles to raise or maintain sufficient capital, it may face difficulty meeting its financial obligations, which can negatively impact investor confidence.
NBFC Stocks In India’s GDP Contribution
NBFCs play a crucial role in India’s GDP contribution by extending financial services to underserved segments, including small businesses, individuals, and rural areas. By providing credit for housing, infrastructure and personal needs, NBFCs help fuel economic growth, especially in areas where traditional banks have limited reach. Their lending activities boost consumption, entrepreneurship and job creation.
In addition to their direct economic impact, NBFCs also support other industries by financing sectors like agriculture, transportation and real estate. This helps enhance overall productivity and contributes significantly to India’s GDP growth. Their ability to cater to niche markets strengthens the financial ecosystem, further promoting economic development.
Who Should Invest In Best NBFC Stocks In India?
As the financial landscape evolves, Non-Banking Financial Companies (NBFCs) are gaining attention for their growth potential. Understanding who should consider investing in these stocks can help in making informed financial decisions.
1. Risk-tolerant Investors: Those comfortable with market fluctuations may find NBFC stocks appealing due to their high volatility and potential for significant returns.
2. Long-term Investors: Individuals looking for long-term growth can benefit from the expanding financial services sector, as NBFCs often show sustained growth over time.
3. Income-focused Investors: Investors seeking regular income may consider NBFCs for their attractive dividend yields, which can be beneficial for cash flow.
4. Diverse Portfolio Builders: Those aiming to diversify their investment portfolio can add NBFC stocks to balance their risk across various sectors of the economy.
Top NBFC Stocks In India FAQs
The Top NBFC Stocks #1: Bajaj Finance Ltd
The Top NBFC Stocks #2: Indian Railway Finance Corp Ltd
The Top NBFC Stocks #3: Jio Financial Services Ltd
The Top NBFC Stocks #4: Power Finance Corporation Ltd
The Top NBFC Stocks #5: Cholamandalam Investment and Finance Company Ltd
The top 5 stocks are based on market capitalization.
The best NBFC stocks based on one-year returns are Saraswati Commercial (India) Ltd, Authum Investment & Infrastructure Ltd, Muthoot Finance Ltd, Pacheli Industrial Finance Ltd, and Rail Vikas Nigam Ltd.
Investing in Non-Banking Financial Companies (NBFCs) can offer attractive returns, but it also carries inherent risks. It’s essential to carefully assess the company’s financial health, regulatory environment and market conditions before making investment decisions. A thorough analysis and understanding of the specific NBFC and its business model can help mitigate potential risks and enhance investment outcomes. Careful consideration is paramount.
To invest in NBFC stocks, open a Demat and trading account with a trusted broker like Alice Blue. After completing the KYC process, research the top-performing NBFCs in India and analyze their growth potential. Alice Blue offers a user-friendly platform to start trading NBFC stocks efficiently.
Investing in NBFC stocks can be a good option due to their growth potential, especially in underserved markets like small businesses and rural areas. They offer higher returns through diverse lending portfolios and attractive dividends. However, NBFC stocks are sensitive to market fluctuations and regulatory changes, posing some risks.
Currently, there are no recognized NBFC penny stocks in India. Most NBFC stocks belong to well-established companies with significant market capitalization. Investors should focus on fundamentally strong NBFCs for long-term growth rather than seeking penny stock opportunities in this sector, as they carry higher risks.
We hope you’re clear on the topic, but there’s more to explore in stocks, commodities, mutual funds, and related areas. Here are important topics to learn about.
Disclaimer: The above article is written for educational purposes, and the companies’ data mentioned in the article may change with respect to time. The securities quoted are exemplary and are not recommendatory.
