Best Top 10 NBFC in India to invest in: do you own any?

Top 10 NBFC in India, Top 10 NBFC in India to invest in

Top 10 NBFC in India to invest today in India

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NBFCs in India have grown significantly over the last five years driven by the rising middle class, increased financial inclusion, and supportive government policy interventions. Along with a favorable regulatory framework, the stable macroeconomic scenario and stable government also played an important role in shaping the NBFCs in India. Enhanced digitalization in the Indian economy helped this sector to emerge as an alternative financing option in India, especially for the MSMEs, which face challenges in obtaining loans from traditional banks.

NBFCs have been playing an important role in the economic development of India. To achieve US$ 7 trillion in GDP by 2030, the role of NBFCs is very important. The market size of NBFCs in India is estimated at approximately USD326 billion in 2023.  

This trend is expected to continue for the next five years, as the demand for digital services in India will continue to grow with the increasing focus from the government. Again, the role of technology, data, and analytics across the value chain helps these NBFCs manage lending, underwriting, collections, fraud management, and data security/privacy.

You may be interested in the the RBI approved NBFC list

Top 10 NBFC in India to invest

Indian economy is expected to grow at a CAGR of 6.5% from 2024-2030. To help this growth MSME sector will have to play a significant role. To sustain this growth of MSMEs, credit deployment will play a crucial role and the role of NBFCs will be critical at this point. Hence, the market size of NBFCs in India is expected to be twofold by 2030.

To support the growth of the MSMEs, the Reserve Bank of India (RBI) has approved approximately 9400 NBFCs to operate in the Indian financial landscape. You can get the complete RBI approved NBFC list from another article here.

However, all the NBFCs are not listed on the stock exchanges. Out of the listed NBFCs I have chosen the top 10 NBFC in India to invest in today. Participate in the growth story of India by investing in these best NBFCs today. This top 10 NBFC in India is not based on market cap, rather by evaluating their future growth, I have chosen to invest in it.

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Top 10 NBFC in India to invest today

The banking regulator Reserve Bank of India (RBI) put a limit on the banking sector’s exposure to non-banking financial companies, or NBFCs to reduce the risk of unsecured loans to NBFCs. Hence, it is expected that the NBFC sector’s assets under management growth will slow down to 14-17% in FY25, compared to the projected 16-18% for FY24.

Now the big NBFCs can issue bonds to raise capital which can be subscribed to by mutual funds, insurance companies, and retail investors. Based on the latest regulatory issues and potential growth in NBFCs, I put the below top 10 NBFC in India to invest in today.

Venture Capital Firms in India, Venture Capital in India

Top 10 NBFC in India to invest today

NBFC in India 2024Market CapPE RatioEPSROCEROE
Bajaj Finance Ltd₹4,44,170Cr.32.2222.3411.8%23.5%
Shriram Finance Ltd₹ 94,657 Cr.14.2176.7712.1%17.3%
Cholamandalam Financial Holdings Ltd.₹21,418.84Cr.12.8588.7910.64%40.34%
Creditaccess Grameen Limited₹23,637.20Cr.17.5784.4212.06%17.87%
Ujjivan Financial Services Ltd.₹ 6,784.62Cr.8.2767.4010.69%42.09%
Muthoot Finance Ltd₹ 66,432 Cr.17.0103.5912.1%17.6%
Power Finance Corporation Ltd₹1,37,548Cr.7.3157.019.08%20.4%
Indian Renewable Energy Development Agency Limited (IREDA)₹ 47,426 Cr.
Manappuram Finance Ltd₹ 16,243 Cr.7.9624.1111.7%16.6%
Poonawalla Fincorp Ltd₹ 38,526 Cr.24.84207.18%7.69%

Top 10 NBFC in India 2024

I will prefer those NBFC in India to invest where PE is less than EPS. In my view, if the PE ratio is less than EPS, then the stock is undervalue considering other parameters are looking good as per the requirement of fundamental analysis.

Please share your thoughts on comment box if you want detail information about the above companies and the methodology of choosing them. I have mentioned one of my criteria just above this. In addition to the above, you can always look for shareholding patter and find out if FIIs, DIIs, or promoters increased their share holding during last quarter. If yet, then go ahead with investing decision.

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