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List Of The Best Nbfc Stocks For Investment In India In 2024

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10 Jun 2024

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Introduction:

Non-Banking Financial Companies, or NBFCs, play a crucial role in India's financial landscape. They provide a wide range of financial services for businesses and individuals. These include various types of loans, asset financing, insurance, and wealth management services, among others. With the Indian economy poised for growth and financial inclusion expanding, NBFCs continue to present lucrative opportunities for investors looking for long-term investments in 2024.

In this blog post, you will explore what NBFC stocks represent and the top NBFC stocks in India that hold promise for long-term investment in 2024. Keep reading.

What are NBFC stocks?

NBFC stocks represent equity shares of Non-Banking Financial Companies (NBFCs) listed on the Indian stock exchanges, i.e., the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE). These stocks signify ownership in NBFCs, which are financial entities offering diverse financial services akin to banks, yet devoid of a banking license.

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Investing in NBFC stocks enables you to participate in the advancement and profitability of NBFC firms in India, potentially yielding returns via long-term capital appreciation and dividends.

Top NBFC stocks for investment in India in 2024

Here’s the list of the best NBFC stocks in India that you can add to your investment portfolio in 2024:

1. Bajaj Finance Limited

Bajaj Finance Limited has emerged as one of the leading NBFCs in India, offering a diverse portfolio of financial products including consumer loans, SME loans, and wealth management services. Despite facing challenges during the pandemic, the company has shown resilience and is well-positioned to capitalise on India's growing consumer market. With a robust distribution network and focus on digital innovation, Bajaj Finance remains a top pick for long-term investors in 2024.

As of 8 April 2024, Bajaj Finance Limited’s shares were trading for Rs. 7,193.60 per share at the NSE and Rs. 7,192.90 per share at the BSE. The company’s market capitalisation and P/E ratio stood at Rs. 4,44,353 crores and 32.24 respectively.

2. Muthoot Finance Limited

Muthoot Finance Limited is another leading NBFC in India that specialises in gold loans and caters primarily to individuals and small businesses in need of short-term financing. The company's widespread presence across India's rural and semi-urban areas gives it a competitive edge in tapping into the gold loan market segment. As gold prices remain resilient, Muthoot Finance presents an attractive investment opportunity for the long term.

As of 8 April 2024, Muthoot Finance Limited’s shares were trading for Rs. 1,675.75 per share at the NSE and Rs. 1,676.30 per share at the BSE.

3. Cholamandalam Investment and Finance Company Limited

Cholamandalam Investment and Finance Company Limited is a part of the prestigious Murugappa Group. The company offers a wide range of financial services including vehicle finance, home loans, and SME loans. With a focus on customer-centricity and risk management, Cholamandalam Finance has steadily expanded its presence across India. As India's economy continues to grow, the company is well-positioned to capture opportunities in the retail lending space.

As of 8 April 2024, Cholamandalam Investment and Finance Company shares were trading for Rs. 1,210.10 per share at the NSE and Rs. 1,210.00 per share at the BSE.

4. Shriram Finance Limited

Shriram Finance Limited has made a name for itself in the Indian NBFC space in recent years. The company specialises in offering loans for procuring commercial vehicles, such as buses, trucks, and passenger cars. It also offers other financing services, including gold loans, working capital loans, MSME loans, farm equipment financing, etc. Shriram Finance has generated a massive revenue of Rs. 32,946 crores in FY23, with an annual growth rate of 58%.

As of 8 April 2024, Shriram Finance shares were trading for Rs. 2,550.40 per share at the NSE and Rs. 2,550.25 per share at the BSE.

To conclude

Investing in these NBFC stocks can offer attractive returns over the long term, provided that you conduct thorough research and due diligence. While the stocks mentioned above have shown resilience and growth potential, it's essential to monitor macroeconomic trends, regulatory changes, and company-specific developments. Diversification across multiple NBFC stocks can further mitigate risks associated with individual companies.

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