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Best NBFC Stocks to Buy – Compare Top 10 NBFC Shares to Buy in India

Last Updated Date - Aug 18, 2022

A growing economy like India always requires funding and financing. Both consumers and corporations always require money for household or industrial needs.

Conventionally, banks have always been the primary source of such funding. But, apart from this, there are also Non-banking Financial Companies (NBFCs) that provide various types of financing today.

An NBFC is a company registered with the RBI that provides several financial services to its customers but does not hold a banking license. The Indian stock exchanges list several NBFC companies in India.

As the economy keeps growing, the importance of NBFCs to provide financing will also keep growing. Thus, we bring to you a detailed write-up of the best NBFC stocks to buy.


Know about the NBFC Sector in India

The top NBFC companies in India are an essential part of the Indian financial ecosystem. As of March 31, 2021, there are 9651 registered NBFCs in the country.

They provide finance across 12 different categories. It has assets worth more than Rs. 54 lac crores. NBFCs have a market share of more than 25% of the banking sector in India.

The NBFCs have grown consistently at a CAGR of 17.91% over the last five years. Thus, making it amongst the fastest growing sectors to watch out for in the Indian economy today.

As several NBFC companies are listed, we bring you a list of the top NBFC sector stocks to buy in this article.Top 10 NBFC Companies in India


Top 10 NBFC Companies in India

This article contains the names and other useful details about the 10 Best NBFC Stocks to Buy in this nation.

The market capitalization of all listed NBFC companies forms the primary basis for our analysis. Accordingly, we have listed the best Non-Banking Financial Company shares in India, in ascending order.

In addition to the top 10 NBFC stocks, we have also included 5 NBFC companies in our ‘honorable mentions’ category: The list of top NBFC shares to buy primarily includes large-cap and mid-cap companies.

The NBFC sector has several large-sized companies, just like the banking sector.

We have chosen market capitalization as the basis for the best indicators of a listed stock’s size and market value. It can be easily calculated.

This is done by multiplying the number of outstanding shares of the stock with its current market price. Thus, the market capitalization of stock changes on each trading day.

In addition to this parameter, we have also listed down other valuable parameters for all 15 stocks. These include last traded price, 52 week high and low prices, 6m and 1-year price growth %, etc.

Let us now get into the details of each of the listed NBFC stocks.


HDFC – Best NBFC Stocks in India

The top-ranked list of best NBFC stocks in India is HDFC Ltd. It is also the top-ranked housing finance company in the country.HDFC - Best NBFC Stocks in IndiaIts operations began in 1977. HDFC has financed more than 9 million housing units to date. Its total loans exceed Rs. 6.2 trillion.

The primary objective of HDFC is to promote the housing sector by providing a flow of resources through housing finance. HDFC has a huge network, with 651 offices spread across the country.

Additionally, it has offices in Dubai, London, and Singapore to disburse NRI housing finance. The company’s loan products primarily include home loans, plot loans, and rural housing loans.

The Company also provides supplemental loans such as house renovation, extension, and top-up loans. It recorded a gross income of Rs.48,176 crores in 2020-21.

HDFC is a large-cap company with a market cap of Rs.4,44,35.4 crores. It is also part of the NIFTY 50 headline index. It is trading at a share price today of around Rs. 2438.

Why should you invest in HDFC stocks?

  • It is a highly profitable company, with a profit after tax of more than 12,000 crores.
  • The housing loan segment is seeing a sharp recovery post-pandemic. This is evident in the fact that year to date, it has grown its loan disbursements by 48%
  • It has pivoted to the digital market – with 89% of all new loan applications received online.
  • There are several favorable government policies to boost the housing sector, and hence the need for housing finance will also rise.

Bajaj Finance – NBFC Stocks in India

Bajaj Finance Limited is listed at second rank in the best NBFC stocks in India. It is a deposit-taking NBFC. It started its operations as Bajaj Auto Finance Limited in 1987. Bajaj Finance - NBFC Stocks in India

The Company is a subsidiary of Bajaj Finserv Ltd, which ranks third on our list. Bajaj Finance today has 2988 offices across the country, with most of these in rural areas.

It provides various financial products to its customers. These are in the areas of Consumer Finance, SME finance, commercial lending, rural lending, and investment services.

Bajaj Finance has two 100% subsidiaries – Bajaj Housing finance and Bajaj Financial Securities Ltd. The Company has a total Assets under Management(AUM) of Rs. 1,52,947 crores.

For 2020-21 was 17,269 crores, with a net profit of almost Rs. 6000 crores. Bajaj Finance is a large-cap company with a market capitalization of Rs.4,24,76.7 crores. Its stock is trading at a market price of Rs.7054.

Why should you invest in Bajaj Finance stocks?

  • It is a highly profitable company. Its revenue has seen double-digit growth, of 28.18% in the last quarter.
  • It has recently forayed into the fin-tech space, which is an upcoming and fast-growing area.
  • Rapid urbanization and increasing customer aspirations to significantly boost its large consumer finance business.
  • It has consistently offered good returns to its investors, having grown 31% in the last year.
  • Bajaj Finance Stock predictions say that the stock prices will rise in the next few months.

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Bajaj Finserv – Top NBFC Sector Stocks

Third, in the list of top NBFC sector stocks is Bajaj Finserv Limited. It is a diversified NBFC with its headquarters in Pune, Maharashtra. Bajaj Finserv operates as a financial conglomerate.Bajaj Finserv - Top NBFC Sector Stocks

It serves its subsidiaries through Bajaj Finance for finance and insurance business through Bajaj Life Insurance and Bajaj General Insurance.

It has a whopping annual revenue of more than Rs. 54,000 crores. It provides all kinds of loans, right from personal loans to business loans to consumer products on EMI. It also offers insurance services and investment services.

Bajaj Finserv has a market cap of Rs.2,58,38.1 crores. Its NBFI share price in the stock market is around Rs.16,180.

Why should you invest in Bajaj Finserv Limited stocks?

  • It handles all consumer finance needs throughout the lifecycle of the consumer. Serving one of the world’s broadest consumer bases, India, it has potential for high growth.
  • It has an established track record of continuously offering innovative financial products to its customers.
  • It has shown a growth of 20% in its net worth in the last year.

Bajaj Holdings and Investment Ltd – Top NBFC Companies in India

Bajaj Holdings and Investment Ltd is the ultimate holding company of the Bajaj Group. It holds investments directly in Bajaj Auto, Bajaj Finserv, and Maharashtra Scooters Ltd.Bajaj Holdings and Investment Ltd - Top NBFC Companies in India

It was established in pre-independence days, in 1945, making it one of the top NBFC companies in India today. Its primary operations are finance and investment activities.

Thus, all its financing activities are carried out through its subsidiaries. Its standalone revenue for 2020-21 was Rs. 431 crores with a net profit of nearly Rs.200 crores.

The Company has a market capitalization is Rs. 57,796 crores and is included in the BSE 200 and NIFTY 200 Index. Its NBFC share price is around Rs.5218.

Why should you invest in Bajaj Holdings and Investment Ltd stocks?

  • It is the holding company for all profitable companies of the Bajaj group.
  • With the negative impact of the pandemic weakening off, Bajaj Holdings and Investment Ltd is expected to witness considerable growth in its financing business.
  • Bajaj Holdings Share Forecast suggests that it has very good future potential.

Cholamandalam Investment and Finance – Top NBFC Stocks in India

Cholamandalam Investment and Finance Company Ltd is ranked fifth amongst the top NBFC stocks in India. It is a group company of the Murugappa Group.Cholamandalam Investment and Finance - Top NBFC Stocks in India

It began its operations in 1978 with its registered office in Chennai. Cholamandalam Investment and Finance started primarily as an equipment financing company.

Today it has expanded its services to include various types of loans, investment advisory, and stockbroking services.

It now has 1029 branches all across the country through which it services more than 14 lac customers. Its total AUM is Rs. 63,501 crores.

It has a net income of Rs.1,885 crores. Cholamandalam has a market cap of Rs.56,397 crores.

Why should you invest in Cholamandalam Investment and Finance stocks?

  • Despite the pandemic, the company saw a growth of 16% in its AUM and a growth of 29% in its profits
  • It is growing at a tremendous pace – developed from a market cap of just Rs.840 crores in 2008
  • Its product portfolio is well diversified across products and geographies
  • It is quickly adapting to the need for digital lending.

Muthoot Finance – Top 10 NBFC Stocks

Muthoot Finance Ltd is the oldest amongst India’s top 10 NBFC stocks. 1939 is its year of establishment. Its primary business is providing gold loans.Muthoot Finance - Top 10 NBFC Stocks

It is the largest gold loan NBFC in India. It also offers other ancillary services such as money transfers and wealth management. Muthoot Finance conducts its operations through 5443 branches.

It services more than 2.5 lac customers every day. Muthoot today has more than 171 tonnes of gold in its custody. It has an annual revenue of more than Rs.4500 crores, with a net profit of nearly Rs.900 crores.

Muthoot Finance has a market cap of Rs.54,279 crores. Its NBFI share price trades at around Rs.1344.

Why should you invest in Muthoot Finance Ltd stocks?

  • A practically fool-proof business model of loans against physical gold
  • The Company is India’s most trusted gold loan brand. It has a near-monopolistic position in the market for its gold loan business.
  • It has consistently witnessed double-digit growth in its business.
  • Also, it has consistently paid out high dividends to its investors – 200% in the last year alone.

Shriram Transport Finance – Best NBFC Stocks to Buy

Shriram Transport Finance is a deposit-taking NBFC headquartered in. 1979 is the year of incorporation of the country.Shriram Transport Finance - Best NBFC Stocks to Buy

As the name suggests, its core business is vehicle financing. It also provides consumer financing, insurance, stockbroking, etc.

Its network is vast, with 1817 branches and 820 rural centres. It has a large workforce with 24,452 employees. Its AUM is massive, standing at Rs.117,243 crores.

This makes it one of the best NBFC stocks to buy. It has an annual revenue of Rs. Seventeen thousand four hundred thirty-six crores and a net profit of Rs.2,487 crores.

Shriram Transport Finance is a fair valued company with a market cap of Rs.32,137 crores. Its NBFC shares in India trade around Rs.1174.

Why should you invest in Shriram Transport Finance stocks?

  • It has a first-mover advantage for its pre-owned commercial vehicles financing business
  • Guarantees back up its entire loan portfolio
  • It has partnered with over 500 private financers to expand the reach of its network
  • The government’s mandatory vehicle scrapping policy to boost its core vehicle financing business.
  • According to Shriram Transport Finance Stock Prediction, it is expected to provide decent returns.

Aditya Birla Capital – Top NBFC Companies in India

The next on the list of top NBFC companies in India is Aditya Birla Capital Limited.Aditya Birla Capital - Top NBFC Companies in India

This NBFC is one of the newer NBFCs, incorporated in 2007. Its financing products include home finance, personal finance, SME finance, loan against securities, and mortgage finance.

It also provides investment services such as mutual funds‘ investments, portfolio management services, etc. Its overall lending book stands at more than Rs.60,000 crores.

The Company has 24 million active customer services through more than 22,500 employees. Its annual revenue stands at Rs.20,447 crores. Its net profit is Rs.1,127 crores.

Aditya Birla Capital has a market cap of Rs. 26,288 crores. Its share price is relatively low, trading at around Rs.108.

Why should you invest in Aditya Birla Capital Limited stocks?

  • It has recorded a 22% growth in customer base in the last year.
  • Its revenue and profits have recorded double-digit growths – 14% and 22%, respectively. This growth is consistent, with PAT growing at a CAGR of 18.5% over the last five years.

Sundaram Finance – Best Non-Banking Financial Companies in India

Sundaram Finance Ltd is one of the best non-banking financial companies in India. 1954 is its year of establishment. The Company provides both financing and investing services.Sundaram Finance - Best Non-Banking Financial Companies in India

Its financing products include car finance, commercial vehicle finance, insurance finance, construction equipment finance, SME finance, etc.

The investment services include accepting fixed deposits, managing mutual funds, and life insurance. Its total AUM stands at Rs. 44,720 crores.

The company’s annual revenue is Rs.4,722 crores and has a net income of Rs. 805 crores. Sundaram Finance has a market cap of Rs.21,954 crores. Its share price is relatively high, trading at around Rs.1935.

Why should you invest in Sundaram Finance Ltd stocks?

  • It has a consistent track record of paying handsome dividends to its investors
  • It has a health net profit margin of more than 20%
  • The Company has consistently maintained a AAA rating (highest rating) from ICRA and CRISIL.

LIC Housing Finance – Top 10 NBFC Shares to Buy

LIC Housing Finance Limited is rounding off the list of top 10 NBFC shares to buy.LIC Housing Finance - Top 10 NBFC Shares to Buy

The Company is a subsidiary of the Life Insurance Corporation of India. LIC Housing Finance is the largest housing finance company in the country.

1989 is the year of incorporation of the company, and Mumbai is its place of incorporation. Apart from its primary business of home loans, it also provides other loans such as corporate loans, loans against securities, etc.

It operates through 282 marketing offices, 24 back offices, and more than 2000 employees. It also has an overseas presence in Dubai and Kuwait.

Its annual revenue is Rs. 19,848 crores with a profit after tax of Rs. 2,734 crores. The Company has a market cap of Rs.2277 crores. Its share trades at around Rs.180.

Why should you invest in LIC Housing Finance Limited stocks?

  • It has one of the largest loan portfolios, of Rs.2,32,003 crores
  • Government’s program to promote affordable housing to boost its business
  • Interest rates continue to below, which will enable home loans provision
  • Increasing urbanization supports the increase of the housing sector and thus the need for home loans.
  • LIC Housing Finance Share Forecast suggests that it has very good future potential.

Mah and Mah Financial Services – NBFC Sector Stocks to Buy

The first company to make it to the honorable mentions list of NBFC sector stocks to buy is Mahindra and Mahindra Financial Services Ltd.

This company aims to be a one-stop solution for consumer finance needs, including home loans, vehicle loans, SME loans, insurance, investment solutions, etc.

It has a market cap of Rs. 19,064 crores. Its share price is trading at approximately Rs.152. Pandemic recovery and rising consumerism in the country will benefit this company.


Poonawalla Fincorp – Non-Banking Financial Institutions Stocks to Buy

Poonawalla Fincorp Ltd features next in our honorable mentions category of non-banking financial institutions’ stocks to buy. It was founded in 1988 and is based in Pune, Maharashtra. It has 295 branches spread across India.

The Company offers a wide array of loans to its consumers. The Company’s operations are carried out through 9500 employees. Its annual revenue is Rs. 2219 crores.

Poonawalla Fincorp has a market cap of Rs.18,465 crores, and its share price is around Rs. 239. Its diversified product portfolio servicing more than 5 lac customers makes it a fast-growing NBFC today.


L&T Finance Holdings – NBFI Companies Shares to Buy

Next in the honorable mentions of NBFI companies’ shares to buy is L&T Finance Holdings Ltd. It is the holding company of L&T Financial Services Ltd.

It provides vehicle finance, microloans, housing finance, real estate finance, and SMB loans. Its total loan book is Rs.85,552 crores, and AUM stands at Rs.77,095 crores.

L&T has a market cap of Rs.17,318 crores. Its share price is low, around Rs.70. The Company’s increasing focus on the growing retail loan segment can be the key to its future success.


Central Dep Service – NBFC Companies in India

Central Depository Services (India) Limited was established in 1999. It is unique amongst the NBFC companies in India. It offers depository services to exchanges, clearing corporations, DPs, and Investors.

Central Dep has 5.56 crore accounts with over 5,33,022 Mn securities in its custody. The Company has a market cap of Rs.14,567 crores, and its share was recently listed via IPO and is trading at a price of Rs.1384.

It has a near-monopolistic position in its line of business.


Shriram City Union – NBFC stocks in India

The last on our list of NBFC stocks in India is Shriram City Union Finance Ltd. 1986 was the year of establishment of the company.

It provides gold loans, business loans, vehicle loans, and home loans. It has an annual revenue of Rs.1484 crores with a net profit of Rs.282.


How to find NBFC stocks for trading?

With all the detailed information on top NBFC stocks, you can begin your trade-in NBFC stocks. Fifteen stocks from a single sector, though it may seem like a lot.

To diversify your investments across more sectors, you may want to narrow down stocks from this long list. For this purpose, you must study the following parameters:

Financial performance – Financial performance is the first and foremost stability indicator.

An NBFC with sound financial performance, which it has sustained over the years, is essential.

Corporate Governance – In recent years, several NBFC and financial services companies have failed due to corporate frauds.

Thus, you must study the strength of the NBFC’s corporate governance standards to ensure safety and security.

P/E ratio – Stock will be a good buy if available in the market at affordable prices.

For this, you can study the PE ratio. This is calculated by dividing the market price of the share by its earnings per share. It indicates whether the stock is fairly valued or not.

Relevant industry news – Being up to date with relevant information and changes in government policies. With this, you can identify those NBFCs that these changes will positively impact.


How to invest in NBFC sector stocks?

Like all other shares, NBFC stocks too can only be bought and sold in dematerialized form. Thus, the essential criteria to invest in NBFC stocks are a Demat account and a linked active trading account.

A Demat account can be opened through your bank with a financial services company or through zero brokerage houses that have become very popular.

To open a Demat account, you must complete your KYC documentation and provide your bank details. Once the Demat account and trading account are activated, you can log in to the portal and begin trading.

Trading platforms today offer lots of value-added services as well. These include research reports, trading charts, watchlists, portfolio tracking, etc.


Top NBFC Companies in India – Conclusion

The NBFC sector is now an integral part of the financial services industry.

They mainly cater to smaller customers and rural and less organized sectors that cannot avail of regular banking loans. In this way, the sector boosts the economy and serves the masses of the country.

Growing urbanization, increasing incomes, and evolving aspirations are the key factors that will enable the growth of this sector.

Further, more favorable government policies such as Make in India and Affordable housing for all will also be beneficial.

Thus, we have summarised the top NBFC companies in India for you to invest in this booming NBFC sector.


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