Best NBFC Stocks in NSE: Top Non-Banking Financial Companies in India

The Indian financial sector has witnessed remarkable growth in recent years, with non-banking financial companies (NBFCs) emerging as key players in driving economic development. Offering a wide range of financial services to individuals and businesses, NBFCs have become a viable alternative to traditional banks. As the Indian economy expands, the NBFC sector presents attractive opportunities for investors seeking long-term growth. In this article, we will explore what NBFC stocks are and highlight the top NBFC stocks in India with potential for investment in 2024. 

Top NBFC Stocks in NSE

Here’s the list of the top 10 NBFC stocks in India based on their 1Y returns:

Disclaimer: Please note that the above list is for educational purposes only, and is not recommendatory. Please do your own research or consult your financial advisor before investing.

Note: The data on this NBFC shares list in India is dynamic and subject to real-time changes. The 10 NBFC stocks were derived from the Tickertape Stock Screener and selected using the following filters on 29th November 2024.

• Sector > Financials > Specialized Finance and Consumer Finance
• Debt-to-Equity Ratio: Set the low
• Net Income (Cr.): Positive
• 1Y Return: Sorted from Highest to Lowest

🚀 Pro Tip: You can use Tickertape’s Stock Screener to research and evaluate stocks with over 200+ filters and parameters.

High-volatility stock portfolios for investors with a high risk appetite

Try smallcase

DISCOVER

High-volatility stock portfolios for investors with a high risk appetite

Try smallcase

Overview of the Top NBFC Companies in India

Here are the overviews of the stocks on the NBFC company list

Saraswati Commercial (India) Ltd

Saraswati Commercial (India) Limited is a Non-Banking Financial Company (NBFC) registered with the Reserve Bank of India. It was incorporated on 24th January 1983. The company primarily focuses on investment, trading in shares and securities, and lending activities. As an NBFC, it follows the necessary prudential norms related to asset classification, income recognition, and provisioning, which apply to all such entities in India. Over the last 5 years, the company’s revenue has grown at a yearly rate of 68.85%, higher than the industry average of 12.49%, and its market share increased from 0.01% to 0.06%. 

Key Corp Ltd

Key Corp Limited, one of the oldest non-banking financial companies in Northern India, was incorporated in Kanpur on 26 November 1985 as Key Leasing and Finance Ltd. The company began operations on 11th December 1985 after receiving the Certificate of Commencement of Business from the Registrar of Companies, U.P. Kanpur. Later, the company applied for a name change, and on 17th April 1996, it was re-incorporated as Key Corp Limited. Over the last 5 years, the company’s revenue has grown at a yearly rate of 76.78%, higher than the industry average of 15.21%, and its market share increased from 0% to 0.01%. 

Gemstone Investments Ltd

Gemstone Investments Ltd is a dynamic investment company specialising in identifying, nurturing, and capitalising on high-growth opportunities across various sectors. The company’s initial focus was on emerging markets and niche industries, but over the years, it has expanded its portfolio to include real estate, technology, renewable energy, healthcare, and financial services. Over the last 5 years, the company’s debt-to-equity ratio has been 0.11%, much lower than the industry average of 348.87%, and its current ratio has been 15102.75, much higher than the industry average of 65.35%.

Tokyo Finance Ltd

Tokyo Finance Limited, incorporated in November 1994, is a Non-Banking Financial Company (NBFC) in India. The company primarily advances, deposits, or loans money, securities, and properties to various entities, including companies, corporate bodies, firms, or associations. Over the last 5 years, the company’s current ratio has been 364.19%, higher than the industry average of 65.35%. As of 29th November 2024, the company had a market capitalisation of Rs. 32.86 cr., and a close price of Rs. 47.15.

Dhruva Capital Services Ltd

Dhruva Capital Services Limited, founded in 1995 in Udaipur, focuses on investment and financing, primarily within Udaipur and nearby areas. Registered as an NBFC with the Reserve Bank of India, it provides hire purchase, leasing, ICDs, loans, and advances services. In 2023, interest income became the company’s main revenue source. Recent efforts to streamline financial operations have shown positive results. Over the last 5 years, the company’s revenue has grown at a yearly rate of 90.5%, higher than the industry average of 12.49%, and its net income has grown at a yearly rate of 169.44%, higher than the industry average of 18.23%.

Available Finance Ltd

Available Finance Limited, based in Indore, India, has provided financial services since its incorporation in 1993. As a non-banking finance company, it offers a range of loans and invests in shares across the Indian market. As of 29th November 2024, Available Finance Ltd had a market capitalisation of Rs. 336.31 cr., and the share price of NBFC closed at Rs. 329.60. Over the last 5 years, the company’s net income has grown at a yearly rate of 27.48%, higher than the industry average of 18.23%, and its debt-to-equity ratio has been 0.27%, lower than the industry average of 701.36%. 

Moongipa Capital Finance Ltd

Moongipa Capital Finance Ltd (MCFL), established in July 1987, is a prominent Non-Banking Financial Company (NBFC) in India. The company is dedicated to providing a diverse range of financial services, including consumer loans and micro-finance, to cater to the varied needs of its clientele. Over the last 5 years, the company’s revenue has grown at a yearly rate of 61.34%, higher than the industry average of 15.21%, and its debt-to-equity ratio has been 2.39, lower than the industry average of 348.87.

Abhishek Finlease Ltd

Abhishek Finlease Limited is a non-banking financial company (NBFC) in India that offers various financial services, including short-term and long-term finance investments and investment consultancy. Over the last 5 years, the company’s net income has grown at a yearly rate of 29.2%, higher than the industry average of 20.97%, and its debt-to-equity ratio has been 1.19, much lower than the industry average of 348.87. As of 29th November 2024, the company had a market capitalisation of Rs. 17.83 cr., and its share price closed at Rs. 41.81.

S R G Securities Finance Ltd

S R G Securities Finance Limited is a rapidly growing non-banking financial company (NBFC) in India that specialises in providing financial assistance for vehicles, construction and mining equipment, and business loans. Incorporated on 6th March 1995 under the Companies Act, of 1956, the company commenced its financing operations in 1999 after obtaining a license from the Reserve Bank of India. Over the last 5 years, the company’s debt-to-equity ratio has been 15.93, lower than the industry average of 348.87, and its current ratio has been 888.89, higher than the industry average of 65.35.

Haryana Capfin Ltd

Haryana Capfin Ltd was initially incorporated as Haryana Engineering Pvt Ltd on 9th September 1998 as a private limited company. It became a public limited company on 3rd February 2006, with its name changed to Haryana Engineering Ltd. Later, on 9th August 2006, the company was renamed Haryana Capfin Ltd. It operates in the finance and investment sectors. Over the last 5 years, the company’s current ratio has been 93.73%, higher than the industry average of 65.35%. 

Get 500+ Readymade Stock Baskets

Created & managed by SEBI-registered experts

Try smallcase

Get 500+ Readymade Stock Baskets

Created and managed by SEBI-registered experts

Try smallcase

How to Invest in NBFC Stocks through smallcase?

You can consider investing in NBFC Stocks through the GVSR-NBFC Segment-Value (V) Buys smallcase managed by GVSRwealth. 

NBFC listed companies operate in a very competitive environment but offer alternate lending opportunities (vis-à-vis banks), particularly to Small & Medium Enterprises (SMEs) and Individuals.

While the cost of funds is typically higher for these companies ( on account of restrictions on raising deposits from the public), their nimbleness in meeting the customer requirements faster through digitalisation etc., gives them a leeway in carving out a niche for themselves in the overall Banking, Financial Services and Insurance (BFSI) sector in India, particularly in the areas such as Personal Finance, Financing for SMEs, Automobile Finance etc.

GVSR-NBFC Segment-Value (V) Buys smallcase by GVSRwealth

Note: Being a thematic smallcase, this smallcase is likely to have fewer stocks/ETFs. The suggested (not mandatory—completely discretionary in your hands) amount of investment is of the order of Rs. 1.00 Lakh. It can be higher or lower based on an individual’s investible surplus, risk appetite, risk capacity, risk profile, asset allocation framework, etc. This is a research recommendation in that sense. Conditions apply.

Disclosure for the GVSR-NBFC Segment-Value (V) Buys smallcase.

What are NBFC Stocks?

NBFC stocks refer to the stocks or shares of Non-Banking Financial Companies (NBFCs) that are listed and traded on the stock exchanges. These stocks represent ownership in NBFCs, which are financial institutions that provide various financial services similar to banks but do not hold a banking license. 

Investing in NBFC stocks allows individuals to participate in the growth and profitability of these NBFC companies in India and potentially earn returns through capital appreciation and dividends.

Why invest in NBFC Stocks?

Here are some key features of NBFC Stocks that make it an attractive investment:

Focus Financial Services 

NBFC stocks represent NBFC companies listed on BSE & NSE primarily engaged in providing financial services such as lending, investment, leasing, and asset management. These listed NBFC companies in India cater to the diverse financial needs of individuals and businesses.

Non-Banking Institutions

Unlike traditional banks, NBFCs are non-banking institutions that do not hold a banking license but offer similar financial services. As a result, investing in NBFC stocks provides exposure to the financial sector without relying solely on traditional banks.

Diverse Product Portfolio

NBFCs offer a wide range of financial products and services, including retail and corporate loans, housing finance, vehicle finance, asset management, insurance, and more. This diverse product portfolio can contribute to revenue generation and growth opportunities for the company.

High Growth Potential

Many NBFCs have witnessed significant growth in recent years due to increased demand for financial services, a rising middle-class population, and government initiatives promoting financial inclusion. This growth potential can attract investors looking for listed NBFC companies in India with strong growth prospects.

Dividend Income

Some NBFCs distribute a portion of their profits as dividends to shareholders. Investing in these dividend stocks can provide potential dividend income, which can be appealing to income-seeking investors.

However, investors should always be mindful of their investment goals and risk appetite before purchasing any stocks.

How to Evaluate NBFC Stocks? 

When it comes to evaluating NBFC stocks, there are several methods you can employ to make informed investment decisions. Here are three key approaches:

Fundamental Analysis for NBFC Stocks

Fundamental analysis involves delving into the financial health, performance, and future prospects of an NBFC. This entails analysing factors such as revenue growth, profitability, asset quality, capital adequacy, and compliance with regulatory standards. By scrutinising financial statements, ratios, and key performance indicators, you can assess the overall strength and stability of the company.

Technical Analysis

The technical analysis revolves around studying stock price patterns, volume trends, and market behaviour to guide investment decisions. By utilising charts, trend lines, moving averages, and other technical indicators, you can identify patterns, support and resistance levels, and potential entry or exit points. Technical analysis provides insights into short-term price movements and market sentiment.

Evaluation of Management and Corporate Governance

The management team and corporate governance practices have a significant impact on the success of an NBFC. Assess the qualifications, experience, and reputation of the company’s leadership. Moreover, you can look for transparent communication, ethical practices, and a strong commitment to shareholder interests. Evaluating management quality helps gauge the company’s ability to navigate challenges and make sound strategic decisions.

Who Should Invest in NBFC Sector Stocks?

1. Investing in NBFC sector stocks can be suitable for individuals seeking exposure to the financial services industry. 
2. Those interested in diversifying their investment portfolio beyond traditional banking stocks may find NBFC stocks appealing. 
3. Investors looking for potential growth opportunities in sectors like consumer finance, housing finance, and microfinance could also consider investing in NBFC stocks. 
4. Investors with a higher risk appetite and a thorough understanding of the NBFC industry dynamics may find these stocks suitable for their investment strategy.

Features of NBFC Stocks

Non-Banking Financial Companies (NBFCs) present unique characteristics that make them a notable segment within the financial sector:

• Diverse Services: NBFCs provide a wide range of services such as loans, asset management, and insurance, targeting niche markets often overlooked by traditional banks.
• Regulatory Flexibility: While NBFCs follow guidelines set by the Reserve Bank of India (RBI), they face fewer compliance requirements compared to banks, offering greater operational flexibility and potential profitability.
• Growth Opportunities: Many NBFCs operate in fast-growing sectors like microfinance, vehicle financing, and affordable housing, which are expanding rapidly in India.
• Risk Management: Managing higher credit risks is essential for NBFCs. The most successful ones implement strong risk assessment and management practices.
• Interest Rate Sensitivity: NBFC stocks are highly responsive to interest rate changes. When rates are lower, their borrowing costs decrease, boosting profit margins.
• Rural Reach: NBFCs often serve rural and semi-urban areas, reaching customers less accessible to traditional banks.

Risks of Investing in NBFC Stocks

Investing in NBFC (Non-Banking Financial Company) stocks comes with its fair share of risks that you should be aware of. Let’s take a look at some of these risks:

Regulatory Changes

One of the risks is the potential impact of regulatory changes. Governments can introduce new regulations or policies that may affect the operations and profitability of NBFCs. It’s important to stay updated on any regulatory developments and understand how they might impact the specific NBFC stocks you’re considering.

Credit Risk

NBFCs primarily deal with lending, which means they are exposed to credit risk. If borrowers default on their loans or the quality of the loan portfolio deteriorates, it can have negative consequences for the NBFC’s financial health. When evaluating NBFC stocks, it’s crucial to assess the creditworthiness of borrowers and keep an eye on the overall loan portfolio quality.

Liquidity Risk

NBFCs rely on various funding sources, such as borrowing and commercial paper, to finance their operations. However, they can face liquidity challenges if they encounter difficulties in accessing funds. Monitoring the liquidity profile and funding sources of NBFCs is important to ensure they can meet their financial obligations.

Interest Rate Sensitivity

Interest rates play a significant role in the profitability of NBFCs. Changes in interest rates can impact borrowing costs, loan demand, and the overall margins for NBFCs. Keep in mind that fluctuations in interest rates can result in volatility in the stock prices of NBFCs. Therefore, it’s essential to assess the interest rate sensitivity of the NBFCs you’re considering for investment.

Economic and Market Factors

NBFCs are influenced by broader economic and market conditions. Factors such as economic slowdowns, market volatility, and industry-specific risks can affect the performance and NBFC share price today. It’s crucial to evaluate the macroeconomic environment and the industry outlook when analyzing NBFC shares.

Corporate Governance and Management Risks

The quality of corporate governance and management practices in NBFCs can significantly impact their stability and long-term prospects. Assessing the track record, experience, and integrity of the management team is important. Additionally, look into the effectiveness of corporate governance mechanisms to gain confidence in the management of the NBFCs you’re considering.

Tips for Investing in NBFC Stocks

Here are some effective tips for investing in NBFC stocks:

• Do Your Homework: Before diving into NBFC stocks, it can be helpful to do your research. Learn about the different types of the top 100 NBFC companies in India and how they operate. Take a deep dive into their financial performance, including revenue growth, market capitalisation, profitability, and debt levels.
• Diversify: Diversification is key to managing risk in your investment portfolio. While NBFC stocks can be attractive, it is also important to diversify your investments across various sectors and asset classes.
• Stay Informed: Keep an eye on market trends and news related to NBFC companies. Stay updated on economic factors, interest rate changes, regulatory updates, and industry-specific developments that may impact NBFC stocks. Regularly check the NBFC share price on NSE and BSE. Being well-informed allows you to make smart investment choices and take necessary actions when needed.
• Consider the Regulatory Landscape: Understand the regulatory environment that governs NBFCs. Stay aware of the guidelines and restrictions they operate under. Keep an eye on any regulatory changes that may affect their operations or profitability. Also, look into the compliance history of the NBFCs you’re interested in to ensure they have a good reputation.
• Think Long-Term: It’s important to approach NBFC stock investments with a long-term perspective. Look beyond short-term market fluctuations and focus on the potential growth and sustainability of the NBFCs you’re considering. Patience and a long-term view can often lead to better investment outcomes.

Advantages of Investing in NBFC Stocks

Investing in NBFC (Non-Banking Financial Company) stocks or the best NBFC in India can be a smart move for several reasons. Let’s dive into the advantages:

• High Potential Returns: One of the exciting aspects of NBFC shares is their potential for impressive returns. These companies operate in sectors like lending, insurance, and asset management, which can lead to significant growth and profitability. Therefore, if you choose well-managed NBFCs with strong risk management practices, you could enjoy attractive returns on your investment.
• Diversify Your Portfolio: Adding NBFC stocks to your investment portfolio is a great way to diversify. NBFCs operate in different sectors, offering exposure to various segments of the economy. Hence, by spreading your investments across sectors and asset classes, you can reduce risk and potentially boost your overall portfolio performance.
• Ride the Financial Sector Growth: NBFCs are part of the financial sector. Which plays a crucial role in driving economic growth. As the economy expands, the demand for financial services such as loans, insurance, and wealth management tends to rise. So, by investing in NBFCs, you can ride the wave of this growth. And benefit from the increasing financial needs of individuals and businesses.
• Flexibility and Innovation: NBFCs are known for their flexibility and ability to innovate. Unlike traditional banks, they can quickly adapt to changing market conditions and tailor their financial products to meet specific customer needs. This flexibility allows them to seize opportunities and serve niche segments that may not be well-served by banks.

Factors Influencing NBFC Stocks

Several factors can influence the performance and NBFC share price NSE. Understanding these factors is crucial for investors looking to make informed investment decisions. Some key factors that can influence NBFC stocks include:

Macroeconomic Factors 

The overall economic environment, such as GDP growth, inflation rates, interest rates, and government policies, can impact the performance of NBFC stocks. Economic conditions play a significant role in determining credit demand, borrowing costs, and regulatory frameworks, which can affect the profitability and growth potential of NBFCs.

Regulatory Environment

NBFCs are subject to specific regulations and guidelines set by regulatory bodies such as the Reserve Bank of India (RBI) in India. Changes in regulations, capital adequacy requirements, lending norms, or compliance standards can have a significant impact on the operations and profitability of NBFCs. Investors should closely monitor regulatory developments and assess their potential impact on NBFC stocks.

Asset Quality and Credit Risk

The quality of assets and the management of credit risk are critical factors in assessing the performance of NBFC stocks. Investors should evaluate the loan portfolio of NBFCs, including the concentration of risk, asset quality, provisions for bad loans, and overall credit risk management practices. Factors such as default rates, non-performing assets (NPAs), and loan recovery rates can significantly impact the financial health of NBFCs.

Industry and Competitive Landscape

The competitive dynamics within the financial services industry, including the presence of other NBFCs, banks, and fintech companies, can influence the performance and NBFC share prices. Investors should assess the market positioning, market share, product differentiation, and competitive advantages of NBFCs within their respective sectors to understand their growth prospects and competitive risks.

Market Sentiment and Investor Confidence

Market sentiment, investor perception, and overall confidence in the financial markets can impact the demand and pricing of NBFC investment shares. Factors such as general market conditions, investor risk appetite, geopolitical events, market capitalisation and global economic trends can influence investor sentiment towards NBFC shares. To make better investment decisions, regularly check NBFC share prices on BSE and NSE.

1 Crore+ people use smallcase for their investments

Download App

1 Crore+ people use smallcase for their investments

Download App

To Wrap It Up…

Investing in NBFC stocks can offer unique opportunities and challenges for investors. The growth potential of the NBFC sector in India, coupled with the diverse range of financial products and services offered, makes it an attractive investment option.However, it is important to approach NBFC stock investments with caution and careful consideration. Conducting thorough research, building a diversified portfolio, and staying informed about market trends and news are essential steps to make informed investment decisions.

Frequently Asked Questions About NBFC Stocks